Switzerland, the mountainous European country that boasts one of the best qualities of life in Europe, with an impressive per capita income of $93,000, the fifth highest in the world. However, in 1992 Switzerland refused to join the largest economic bloc on the planet, the European Union, which has 27 member countries that guarantee the free movement of workers, capital and services within their borders, as well as adopting a single currency, the Euro. Interestingly, despite not being a member of the bloc, Switzerland is seen by the union’s top management as a country that has more privileges than many member countries, to have an idea, the Swiss citizen is about 2900 euros richer per year, thanks to the European common market, being the most benefited in Europe.
In this article we will understand why Switzerland refused to join the European Union and how the characteristics of this society influence this decision. Check also the Guide of Basel!
Switzerland’s relationship with the European Union
To understand Switzerland’s relationship with the bloc we need to go back to the early 1990s, when the European Union was founded with the Maastricht Treaty, which deepened the continent’s integration.
Unanimous rejection of 50.3%.
At the time, the union was gearing up for a major expansion, both to previously sceptical Western European countries such as Austria and Sweden and to Eastern European countries with the fall of communism. However, while other countries subsequently joined the bloc, that same year there was a referendum where the Swiss rejected by a slim margin of 50.3% membership of the European economic area which at the time was considered a precursor to membership of the European Community.
Switzerland has since explored a number of bilateral agreements with the union, negotiating 120 bilateral agreements with the European bloc over the years, and these include access to the European single market, scientific research, police cooperation and allows free and unrestricted movement of people between member states through the Schengen Area.
European Free Trade Association (EFTA)
In addition, Switzerland is also part of another bloc of non-EU members, the European Free Trade Association (EFTA), which grants the country and the three other members, namely Norway, Iceland and Liechtenstein, access to certain trade and economic advantages within the association and Europe.
Switzerland For Economy, But Against Political Integration
However, unlike Switzerland, these countries agreed to be part of the European economic area to gain access to the single market with agreements regulated by European bodies and courts. While these bilateral agreements with the union have been mutually beneficial over time, it became clear to Europe that I package deals were not a more efficient method to manage such a complex relationship. As a result, the two sides began negotiations in 2014 to create an institutional framework agreement aimed at incorporating Switzerland into the bloc’s legislation. However, in 2021 Switzerland ended the negotiations due to issues such as wage protection, state aid and access for European citizens to Swiss social security benefits. Switzerland is therefore a problematic country for the European Union, as it is always in favour of economic cooperation, but against accession and greater political integration.
This position has earned Switzerland a reputation as a country that pursues only its own interests without considering others, so much so that when the United Kingdom decided to leave the bloc, the possibility of an agreement along Swiss lines was rejected. The question then arises why Switzerland prefers not to join the European Union.
Why does Switzerland prefer not to join the European Union?
One of the first reasons is that since Switzerland made its neutrality towards the international community official in 1815, this characteristic has been a pillar for the Swiss, so much so that the country is not part of NATO and only decided to join the UN in 2002, 57 years after the organisation’s creation.
As Switzerland is not a member of the European Community, it is perceived as more neutral than countries that are avowedly neutral but are part of the bloc, such as Austria, Ireland and Sweden.
Neutrality: The official mark of Switzerland
The neutrality label is used by Switzerland to promote its good offices, i.e. helping as a mediator for conflicts and serving as headquarters for major world organisations such as the WHO, World Economic Forum, World Trade Organisation, FIFA and the International Olympic Committee. Despite this, its reputation as a neutral country has been questioned a few times throughout history, especially in World War II when the nation served as a base for gold looted from the Germans, when it maintained relations with the Apartheid regime in South Africa, and recently when it followed much of the West in applying sanctions on Russia and freezing assets of Russian oligarchs, companies and banks.
Divergence of political ideas
But even so neutrality continues to be a trademark of Swiss foreign policy. Sovereignty is another point often mentioned when arguments against joining the European Union are presented, because besides all the obvious issues such as disagreements over migration and the problem of lack of autonomy by adopting the Euro as its currency, the bloc follows regulations over certain policy areas. So areas such as trade, justice, defence, health and fishing, for example, are influenced by the bloc’s leaders, which means Switzerland would suffer, especially in relation to one of its main sectors, banking, which is much more deregulated if compared to the European standard. This threat to sovereignty prevents other countries like Iceland and Norway from joining the European Union, since they are countries dependent on natural resources, like fishing in Iceland and oil in Norway.
Agriculture and immigration
On the Swiss question, it is important to highlight that the country has one of the most government subsidised agricultures in the world, which would make it difficult to stipulate a compatibility with the European system. In addition, because salaries in Switzerland are higher than the average of the bloc and the country has one of the best qualities of life in the world, there is a concern with the growing migration, because while Switzerland theoretically offers freedom of movement to European Union citizens as part of free trade agreements, there is a certain bureaucracy to get residence, requiring a permit.
How many people from the European Union currently live in Switzerland?
Currently, around 1.4 million people from European Union member states live in Switzerland, but there is a fear that this number will increase with a possible accession. In Switzerland’s case, its geographical proximity to major European powers, as well as its official languages of German, French and Italian, make its neighbours more likely to emigrate to Switzerland than to Nordic countries because of the ease of language.
Fear of ruining Swiss pension system
With this, the current president of the Swiss federation, Ignazio Cassis, has cited that Switzerland cannot accept the European Union’s demands for equal rights for workers in the bloc, as this would mean an unwelcome change of principle in Swiss migration policy. The government also fears it could cause higher social security costs and endanger the social harmony of Swiss society.
Political System
The Swiss political system is also one of the important factors for this position, as the country adopts the system of direct democracy, meaning that the Swiss electorate can vote several times a year through referendums on various issues, both to question the laws voted by the Federal Parliament, and also to introduce amendments to the Federal Constitution. Direct democracy is something extremely sacred to the Swiss, and many fear that membership of the European Union could reduce their political influence.
Which section of the Swiss population wishes to join the European Union?
It is estimated that around 12% of the popular vote in Switzerland could not even occur if the country were a member of the bloc subordinated to European law. Moreover, that same direct democracy that alienated the nation from the European community in the 1990s makes the current situation even worse, as less than 20% of the Swiss population supports EU membership.
This way, the majority of the Swiss electorate and cards would have to agree to join the European Union, something that would be very difficult at the current juncture. Another point worth mentioning is that Switzerland does not have the same motivations that make most countries join the European Union. France and Germany, for example, are major global players in world geopolitics and therefore increase their influence within the block.
In some cases there is a concern for security, something guaranteed in the Article 42 clause, which requires other EU countries to support and assist a member state under armed attack. In other cases, there is a desire for greater political stability and economic development, where, according to estimates, the average European citizen is around 950 euros richer per year due to the European single market. However, these factors do not encourage Switzerland to join, as it is one of the most politically stable and prosperous countries in the world, and has no ambitions to become a protagonist on the international scene.
How much has the Swiss GDP grown in recent years?
Moreover, as Switzerland has a large disparity in wealth in relation to other countries of the bloc, it would be a net contributor to the Union, i.e., one of the countries that would pay more to the bloc and receive less, something that certainly the country would not be willing to do. Since 1992 the Swiss GDP has jumped from US$ 280 billion to more than US$ 812 billion by 2021, a much better performance than Sweden and Austria, which were initially skeptical but later joined the bloc.
Today the Swiss economy is highly integrated with the European Union, as bilateral agreements have allowed for this close relationship with the union. To give you an idea, 67% of Swiss imports come from the bloc, and the European Union is the destination for more than 50% of Swiss exports.
The country is notorious for having a totally export oriented industry, so it is not surprising that the majority of the population, as well as politicians and businessmen, want to keep the status. Therefore, there are several reasons why the Swiss do not want to join the European Union and therefore the country is trying to buy time to stay in that status.
Overall conclusion
However, the leaders of the bloc understand that in the current situation the Swiss have more advantages than many member countries, so Europe’s patience is running out, especially after the abrupt departure of the Swiss in 2021 from the negotiations for the framework agreement with the union, leaving no doubt that this issue will remain in evidence in the coming years.
