1.

3 Switzerland in a Global Context

Thomas Bernauer and Stefanie Walter, ETH Zurich

1 2 3 4 5

Table of Contents Introduction Switzerland from an international perspective Economic Integration and Political Neutrality Foreign Policy Adjustment Processes Outlook

58 58 64 66 71

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Introduction

Economic integration and political abstinence this fine balance has characterized Switzerlands relationship with the international community since the Swiss federal State was founded in 1848. Geopolitical changes since the mid1980s and the growing integration of international markets (globalization) have, however, increasingly challenged this traditional model of Swiss foreign policy. With its entry into the United Nations (2002) and two packages of bilateral treaties with the EU (2000, 2005), Switzerland has taken significant steps towards a stronger political involvement in the international arena. Nevertheless, on the issue of EU membership, strong divisions among voters and policymakers persist. This chapter discusses Switzerlands position in the global economic and political arena. We start by comparing Switzerland with its neighbours as well as some additional countries. We then show that Switzerland is one of the most globalized, i.e., most open, countries in the world. Finally, we argue that Switzerlands political system has slowly but noticeably reacted to the global political and economic changes of the recent past. Nevertheless, with respect to foreign policy, voters remain divided into two camps. These camps view the consequences of increasing integration into the global arena very differently, in particular with respect to the consequences for sovereignty, neutrality, federalism and direct democracy. This division causes public controversies about foreign policy issues that at times appear not to address the real social, economic and security issues confronting the country.
2 Switzerland from an international perspective

Switzerland is located in the heart of Europe, bordering on Austria, France, 2 Italy, Germany and Liechtenstein. With an area of 41,000 km and a population of 7.5 million, it is one of the smaller European States. Yet its economic th output (in 2004, Switzerland ranked 37 worldwide in terms of real GDP) and its role as a key transit route across the Alps make Switzerland an important European State. In the following sections we compare Switzerland internationally in five areas: political and economic freedom, economic output, environmental protection, defence, and development assistance.

Political and Economic Freedom

Until the end of World War II, Switzerland was one of the very few European countries with a long and continuous tradition of liberalism, democracy and constitutionalism. With Eastern Europes democratic transition at the end of 58

the 1980s, the degree of political freedom traditionally enjoyed by the Swiss people has now become the European norm rather than the exception. Wellestablished measures for the degree of democracy (e.g., Freedom House Index, Polity IV Index) show that most other advanced industrialized countries now also achieve the highest possible scores. However, the fact that Switzerland and the United States rank first in an international comparison of the average degree of democracy for the period 19002003 underscores Switzerlands long democratic tradition (Figure 1). Figure 1:
10 8 6 4 2 0 Switzerland USA France Austria Germany Italy

Degree of Democracy (Polity IV-Score) in 19002003

Source:

Marshall et al. (2005). This index varies from -10 (full autocracy) to +10 (full democracy).

Switzerland also scores well with regard to economic freedom. The 2005 Index of Economic Freedom, which measures the extent of public intervention in the th economy, places Switzerland slightly ahead of its neighbours, ranking it 15 out of 161 countries (Miles et al. 2006; Fig. 2). In the Worldbanks index for Ease of Doing Business, Switzerland holds a rank of 17 out of 155 countries for 2005 (Worldbank 2005a), placing it behind the USA (3), but ahead of Germany (19), Austria (32), France (44) and Italy (79). In other words, Switzerland offers its citizens both comprehensive political and economic freedom.

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Table 1:

Economic freedom according to the Index of Economic Freedom 2005

Switzerland Austria France Germany Italy UK USA Overall Score 1.89 1.95 2.51 1.96 2.50 1.74 1.84 Trade 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Tax burden 2.9 3.5 4.1 3.1 4.0 3.9 3.9 Public Intervention 2.0 2.0 3.0 2.0 2.0 2.5 2.0 Monetary Policy 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Foreign Investment 2.0 2.0 3.0 1.0 2.0 1.0 2.0 Banking 2.0 2.0 3.0 3.0 3.0 1.0 1.0 Wages and Prices 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Property Rights 1.0 1.0 2.0 1.0 3.0 1.0 1.0 Regulation 3.0 3.0 3.0 3.0 3.0 2.0 2.0 1.0 1.0 2.0 1.5 3.0 1.0 1.5 Informal Market Source: Miles et al. 2006. This index ranks 161 countries and varies from 1 (very high economic freedom) to 5 (very low economic freedom).

Economic Output
With a per capita income of around CHF 60,000 (Bundesamt fr Statistik 2005), Switzerland is one of the richest countries in the world. In terms of real per capita GDP, it ranks behind Luxembourg, the USA and Norway, but ahead of its neighbours. In 2004, the Swiss per capita income was approximately 25% higher than the average per capita income in the EU member states. In comparison with other countries, Switzerland exhibits a high degree of both economic and political stability, which in addition to its economic competitiveness forms the basis for the countrys prosperity. With an average of 0.85%, the rate of inflation has been very low in the last 10 years (19952004), and the value of the Swiss Franc has remained stable. In 2005, Switzerland was ranked as the eighth most competitive country in the International Institute for Management Developments World Competitiveness Ranking, which considers 314 criteria on economic performance, government efficiency, business efficiency, and infrastructure (IMD 2005). In recent years, Switzerland has lost some of its lead as the richest OECD country, a position it had held until the early 1990s. The main reason is the slow growth of the Swiss economy, most notably in inward-oriented sectors. In the 1990s, the average rate of economic growth of 0.4% was substantially lower in Switzerland than, for instance, in the USA (1.9%). In the same time period, the unemployment rate in Switzerland surged and has fluctuated around 4% ever since, a level seven times higher than at the end of the 1980s (Bundesamt fr Statistik 2005). Nevertheless, Switzerland still has a smaller unemployment problem than most of its neighbours the latter recorded an average rate of 7.6% in 2002.

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Figure 2:
50,000

Per Capita Income, 19712003 (in USD, 2000 exchange rate)

Switzerland Italy France Norway Germany USA

40,000

30,000

20,000

10,000

0 1971 1975 1979 1983 1987 1991 1995 1999 2003

Source:

Worldbank 2005b.

A broader look at socioeconomic development also reveals a top position for Switzerland. The 2005 Human Development Index, which takes into account life expectancy and education in addition to economic output, ranks Switzerth land 7 out of 177 states (UNDP 2005). A similar picture emerges when measuring Switzerlands international competitiveness in terms of research and development, e.g., in terms of expenditures for R&D, the number of patents, and publications in high-quality scientific journals.

Environmental Protection
The Swiss public is, by and large, very supportive of environmental protection and sustainable development. In a survey conducted in the year 2000, 64% of the respondents opined that environmental protection was one of the most important things in life (ISSP 2003). In another survey, conducted in the year 2003, almost all respondents favoured public regulation in the area of environmental protection, while over two thirds supported a redistribution of income in favour of the environment. Environmentally friendly behaviour is quite common among Swiss people, at least in their own assessment (UNIVOX 2003). Climate change, air and water pollution, biodiversity, and forest protection constitute the most important issue areas in Swiss environmental policy, both domestically and internationally. Consequently, Switzerland has also signed and 61

ratified many international environmental treaties. According to a 2003 survey, 95% of the Swiss population favours international environmental cooperation (ISSP 2003). Yale Universitys Environmental Sustainability Index (ESI) shows that this declaratory support also translates into real ecological and socioecoth nomic results (Esty et al. 2005). In 2005, Switzerland ranked 7 in the ESI th Index (2002 ranking: 5 ), trailing behind the Scandinavian countries and Canada, but ahead of Germany, France, Italy, Austria and the USA (Figure 3). Figure 3:
80 60 40 20 0
Norway

Environmental Sustainability Index 2005

Sweden

France

Switzerland

Canada

USA

Germany

Source:

Esty et al. 2005.

Defence
Political science research on the determinants of military spending has argued that small countries, particularly members of military alliances, tend to free ride, letting their larger alliance partners bear a larger part of the security burden (e.g., Hartley and Sandler 1995). The extent to which this proposition explains Swiss military spending has not yet been satisfactorily explored. On the one hand, given its neutrality, Switzerland cannot rely on large alliance partners. On the other hand, most observers of Swiss Security Policy believe that Switzerland to some extent profits from NATOs security shield (Spillmann et al. 2001). By international comparison, Swiss military spending is rather low (Figure 4). Relative to GDP it only amounted to one fourth of US military spending in 2003, but was slightly higher than Austrias military expenditures (a similar neutral, centrally located, and small state in Europe). A study by Bernauer and Koubi (2005) concludes, however, that other countries military expenses have 62

Netherlands

United Kingdom

Austria

Italy

no statistically significant effect on Swiss military spending. Internationally exceptional is the fact that the existence of the Swiss army as such became the subject of a referendum in 1989, in which a sizeable minority of 36% voted for the abolition of the military.

Figure 4:
6%

Military Spending as a Percentage of GDP

Austria Italy France Switzerland Germany USA

5% 4% % GDP 3% 2% 1% 0% 1988 1990 1992 1994 1996 1998 2000 2002

Source:

SIPRI 2005.

Development Assistance
To avoid reproach for being a rich, neutral free rider, Switzerlands foreign policy has, since World War II and particularly since the 1970s, emphasized solidarity with poorer countries. Nevertheless, as measured by the level of funding for development assistance (which only measures the quantity, and not the quality of this assistance), Switzerland only holds an average position when compared with other OECD states (Figure 5). In 2004, it spent around CHF 2 billion on development assistance. This represents around 0.4% of GDP (DEZA 2005, compared with 0.32% in 1990), and is significantly less than the UNs recommendation of 0.7%. In 2004, about three quarters (77%) of Swiss federal, cantonal and municipal development assistance were used for bilateral assistance.

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Figure 5:
1.0% 0.8% 0.6% 0.4% 0.2%

Expenditure for Development Assistance as a Percentage of GDP (2003)

Netherlands

Germany

France

Italy

0.0%
Norway

Switzerland

Sweden

Source: 3

UNDP 2005.

Economic Integration and Political Neutrality

The literature on Swiss foreign policy has long painted the picture of a country that is highly integrated into the world market economically but politically only weakly involved with the outside world (e.g., Gabriel 1997). Switzerlands nonmembership in the UN (until 2002), the EU and NATO lies at the heart of this line of argument. However, with UN membership and the completion of two far-reaching bilateral sets of agreements with the EU, this assessment needs to be revisited. With 54.6% of the voters in favour, UN membership was narrowly approved on 3 March 2002. Twelve cantons voted yes, eleven voted no. In September 2002, the UN General Assembly agreed to make Switzerland the th 190 member of the United Nations. The first bilateral set of treaties with the EU was accepted in a May 2000 referendum (67.2% Yes votes), while the second set of treaties (or, more precisely, those provisions concerning the Schengen/Dublin agreement) was approved in June 2005 (54.6% Yes votes). What has caused this change in Swiss foreign policy? How far is Switzerland willing to go in terms of political integration into the international community? The next section argues that Switzerland has very close socioeconomic ties with the outside world, and that this has eventually also led to stronger political ties to the international arena. Since this change has frequently been the subject of domestic political controversies and resistance, we also look at the political opponents of foreign policy openness. 64

United Kingdom

Canada

Austria

USA

Switzerlands socioeconomic ties with the world

Important sectors of the Swiss economy have traditionally had a very strong outward-orientation, notably, the banking, chemical, pharmaceutical and machine-building industries. In 2004, Switzerlands exports in goods and services amounted to almost CHF 150 billion. Germany, the USA, France and Italy are the most important trading partners. Comparing foreign trade to GDP ratios, a common measure of trade openness, Switzerland ranks behind Austria, but ahead of its neighbours, contributing about twice as much to world trade than to world production (Kappel and Landmann 1997). Such a high trade coefficient is not unusual, as small countries usually trade more relative to their GDP than big countries with a similar economic structure (e.g., Bernauer 2000). International capital flows are equally important for Switzerland. On the one hand, the country is popular with foreign investors. In 2004, Swiss banks reported a net capital import of almost CHF 17 billion in the credit business. On the other hand, Switzerland holds important investments abroad, for example in the form of foreign subsidiaries of Swiss companies. The capital yield from those investments abroad amounted to CHF 87 billion in 2004, almost one fifth of Swiss GDP.

Figure 6:
70%

Exports and Imports as a Percentage of GDP (2002)

exports imports

60% 50% 40% 30% 20% 10%

Netherlands Germany Italy

France

0%

Canada

Austria

Switzerland

Norway

Sweden

Source:

World Bank 2005b.

United Kingdom

USA

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International transactions contribute between 40% and 50% of Switzerlands GDP. The economic exchange with the EU is particularly strong. In 2004, approximately two thirds of Swiss exports were destined for EU countries, while 83% of imports originated in the EU. 43% of total Swiss foreign direct investment flowed into the EU, while 56% of FDI in Switzerland came from EU countries. More than half (57%) of the 1.5 million foreign residents in Switzerland carry an EU (or EFTA) passport. Similarly, 61% of Swiss citizens registered as living abroad are residing in an EU Member State (Integrationsbro EDA 2005). Switzerlands deep integration with the outside world is not limited to economic ties. A.T. Kearneys Globalization Index recognizes that global integration consists of various non-economic aspects as well and therefore measures the degree of globalization by taking into account o technological connectivity, personal contacts and (international) political engagement in addition to economic integration (A.T. Kearny 2005). Placed behind Ireland and Singapore, Switzerland ranks third in the 2005 ranking of 62 countries and is hence one of the most globalized countries in the world (Table 2). Table 2: Degree of Globalization
Switzerland 18 5 2 4 1 11 14 5 29 13 41 10 3 Austria 14 12 11 2 31 16 15 14 12 2 6 8 9 Germany 30 54 16 21 49 14 21 16 2 9 28 11 21 France 46 10 15 14 39 20 19 20 2 6 6 9 18 Italy 50 40 18 20 44 23 33 24 5 18 6 12 27

Trade FDI Intl. Telephone Traffic Travel Remittances / Personal Transfers Internet Users Internet Hosts Secure Servers Memberships in Intl. Organisations UN Peacekeeping Ratified Intl. Treaties Governmental Transfers Overall Ranking Source: 4 A.T. Kearney 2005.

Foreign Policy Adjustment Processes

Government documents on the conceptual foundations of Swiss foreign policy as well as real-world decisions show that substantial adjustment processes have taken place in Swiss foreign policy in the last 1015 years. The geopolitical and economic changes since the mid-1980s led to obvious tension between the new foreign policy requirements and domestic legitimacy issues. The first two major 66

attempts at greater political integration into the international community ended in a veritable debacle for the Swiss government. In 1986, the governments proposal to join the United Nations was rejected in a referendum, even though Switzerland had been a member of various special UN agencies for many years. In 1992, a proposal to join the European Economic Area suffered the same fate. Other neutral European countries Austria, Ireland, Finland and Sweden had long ago joined the UN and had already become members of the EU in 1973 (Ireland) and 1995 respectively. A lot has changed since then. Switzerland joined the UN in 2002. In 2000 2005, it negotiated two sets of bilateral treaties with the EU. These agreements go far beyond the trade liberalization measures under EFTA. We will now take a look at the most important conceptual changes in Swiss foreign policy and related changes in decision-making processes. We then examine the political forces that continue to act against the further political integration of Switzerland into the international community.

Swiss Foreign Policy Transformations

The concept of neutrality, the most important guiding principle of Swiss foreign policy well into the 1990s, originally had a purely instrumental character. In part due to its internal fragmentation, Napoleons forces met rather little resistance when occupying Switzerland in the late 18th Century. Moreover, in 1847 a (small) civil war broke out between conservative rural cantons and liberal urban cantons. In response to these problems, the founders of the modern Swiss State (established in 1848) defined abstinence in foreign policy as an important means to avoid conflict at home as well as with other states. In the First and Second World War, and also in the Cold War, neutrality combined with strong armed forces became the central pillar of Swiss foreign policy. Indeed, the fact that Switzerland has managed to stay out of any war since the early 19th Century on an otherwise war-stricken continent has been widely interpreted as a direct result of its neutrality and its strong military. As a consequence, after World War II Switzerland strongly hesitated to join even those international organizations that are perfectly in line with its political, social and economic value system and important to its foreign economic relations. It joined the Council of Europe 14 years, the GATT (the WTO since 1995) 19 years and the Bretton Woods institutions 47 years after they were founded. Its reluctance to become involved in foreign security policy is also obvious from the fact that, even 15 years after the end of the Cold War, only a few hundred out of around 200,000 Swiss soldiers are involved in international peacekeeping or observer missions. 67

In a foreign policy report issued in 1993, the Federal Council (Switzerlands collective presidency) stated for the first time that the important position of Switzerland in the global economy may not be fully compatible with its absence in important international decision-making fora such as the EU and the UN. It also noted that, at least in the long run, Swiss interests might be better served by participating in those decision-making processes than by merely implementing (albeit by autonomous decision) what other States and international organizations have decided (autonomer Nachvollzug, or autonomous implementation). A follow-up report, published in November 2000, presented the governments willingness to push forward Switzerlands international political integration. It presented an updated diagnosis of the foreign policy problems facing Switzerland, and it defined Swiss foreign policy goals more clearly in terms of values and interests that reach far beyond conventional foreign economic and security relations. Particular emphasis was placed on multilateral cooperation. Neutrality as a means in Swiss foreign policy was mentioned in some places in the report, but in contrast to previous reports it was clearly not identified as the central element of Swiss foreign policy. Another update of the 2000 report, issued in May 2005, sticks to the main lines defined in 2000. It sketches the principal global changes since 2000, particularly problems of terrorism, the enhanced hegemonic position of the USA, the emergence of new geopolitical powers, notably China and India, Switzerlands new UN membership, the Millennium Goals of the UN, EU enlargement, and the second set of bilateral treaties between the EU and Switzerland. The report reiterates the main goals of Swiss foreign policy, as stated in the new federal constitution of January 2000. These five goals, which are derived from the general goal of preserving Switzerlands independence and welfare, are: peaceful co-existence of nations, respect for human rights and promotion of democracy, protection of the environment and sustainable development, safeguarding the interests of the Swiss economy abroad, and reduction of poverty and suffering worldwide. The 2005 report suggests, furthermore, that the government is trying to define strategic priorities more clearly with respect to specific regions and countries beyond Europe and also to identify the means to achieve specific goals. It also seeks to communicate the conceptual developments in Swiss foreign policy more systematically to the broader public. Besides these changes at the declaratory level, it is important to look at adjustments in the political decision-making system. In the 2005 report, the Swiss government noted that better coordination among the various institutions and agencies involved in foreign policy was needed. Indeed, foreign policy decisionmaking today appears more complex than it was during the Cold War. On the 68

one hand, the direct democratic component of Swiss foreign policy has been enhanced by an expansion of opportunities for referendums (Staatsvertragsreferendum, as set forth in Articles 141 and 141a of the Swiss Constitution). On the other hand, several more subtle developments are worthy of note. Hirschi et al. (1999) and Klti et al. (2005) examine 802 international agreements between Switzerland and other countries or international organizations concluded in the 1980s and 1990s. They find that the number of agreements doubled from the 1980s to the 1990s. Yet they observe neither a thematic expansion nor a trend away from neighbouring states and Western Europe as a whole; nor do they find a trend towards more multilateral cooperation. In comparison to domestic policy decisions, however, decision making in foreign policy involves less participants across different levels of policy-making, although more administrative units of the federal Government are involved. The federal council and the federal administration remain the central actors in foreign policy, while the parliament, the cantons, interest groups and the wider public are involved to a lesser extent. Swiss foreign policy thus remains more centralized and executive-dominated than other policy areas. Sciarini et al. (2002) come to similar conclusions. They study laws that were passed by Parliament in 19951999 and were subject to direct-democratic decision making and find that, with the exception of laws implementing EU standards (measures of autonomous implementation see above), laws with a stronger international component were associated with less consultation at the preparliamentary stage and less conflict in Parliament.

Limits of Foreign Policy Openness

Public opinion is a key factor in Swiss foreign policy making, primarily due to central characteristics of the Swiss political system, notably direct democracy, federalism and consociational democracy. While many foreign policy issues and decisions are not substantially noticed by the wider public, fundamental decisions in Swiss foreign policy are directly dependent, via initiatives and referendums, on the publics political will. In addition, certain decisions, especially joining collective security organizations and supranational organizations, require the consent of the majority of cantons (as expressed by the majority of voters in each of these cantons) in addition to the majority of voters in Switzerland as a whole. This rule (called Stndemehr) grants small, rural (and usually more conservative) cantons disproportionate influence. The strong direct-democratic component means that important foreign-policy decisions must be supported by a large part of the population. It also implies that far-reaching changes to the status quo in foreign policy are often very hard to achieve. 69

The very slow adjustment of Swiss foreign policy to the global changes of the last two decades is primarily due to the fact that an important part of the Swiss population is (and remains) sceptical with respect to further foreign-policy openness. Surveys show that the share of opponents to further political integration into the international system has remained quite stable at around one third for the past ten years (Fig. 7). Another third is willing to support a cautious integration. The remaining third can be classified as supporters of a much more pro-active foreign policy (Haltiner et al. 2005). Also, in most surveys, around 50 to 60% of the respondents state that they are not in favour of joining the EU (Cemerin and Ruloff 2005). Surveys on neutrality show that this traditional institution enjoys persistently high levels of support. This demonstrates that neutrality has become much more than a means to avoid conflict (as originally defined), and is now part of the countrys political identity. For the past ten years, more than 70% of the respondents in most surveys have claimed that neutrality is inextricably linked to the Swiss State (Haltiner et al. 2005). Respondents who are strong supporters of neutrality tend to have stronger reservations against further foreign-policy openness than respondents who note that they could accept abandoning neutrality. Figure 7:
60 50 40 30 20 10
soft/slow opening autonomy 1998 2000 2001 1999/1 1999/2 far-reaching/fast opening 2002 2004 2003/1 2003/2 2005

Support for foreign-policy openness, % respondents

0
1993 1994 1995 1996 1997

Source:

Haltiner et al. 2005.

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These results do not imply that Swiss voters are generally opposed to international cooperation. Yet it appears that Swiss voters are particularly cautious with respect to long-term institutionalized commitments. In a 2004 survey, for example, around 60% of the respondents were in favour of helping poor countries. More than 70% were in favour of international cooperation in areas such as environmental policy, transportation, and refugees. But co-operation in defence policy was supported by only one third (Cemerin and Ruloff 2005); and the majority of the population remains very sceptical about the benefits of joining the EU and it is outright opposed to joining NATO.
5 Outlook

Switzerlands position in the world is characterized by contradictions. While it is one of the most globalized countries from a socioeconomic viewpoint, the political adjustment process to the global geopolitical and economic changes since the mid-1980s has been slow and protracted. Notwithstanding its decision to become a member of the Bretton Woods institutions (most notably the World Bank and the International Monetary Fund) and the United Nations, and to ratify two comprehensive sets of bilateral treaties with the EU, Swiss voters and their policymakers shy away from seeking membership in the European Union (let alone NATO). This reluctance persists despite the fact that the EU is the most important political institution in Europe beyond the traditional nation state and that EU decisions have implications for Swiss welfare and security that can hardly be overestimated (see Goetschel et al. 2002). Most European states believe that socially and environmentally benign market integration, economic growth, prosperity, and sustainable development in general can best be achieved by giving up some national sovereignty in return for the ability to gain some influence on the behaviour of other states. These states believe, furthermore, that this process, the so-called pooling of sovereignty, can be organized more efficiently and effectively in a supranational organization like the EU than through a network of bilateral relations among 25 EU member states and hence 300 country dyads. Switzerland, however, has chosen a more sovereignty-centered approach, even though this significantly reduces Swiss influence on other countries and their joint decisions in the EU. In addition, the resolution of cross-border problems between Switzerland and EU member countries through the bilateral approach is becoming more timeconsuming, complicated and sometimes practically impossible. On a more fundamental note, it appears questionable whether focusing present controversies on issues of sovereignty, neutrality, federalism and direct democracy (and hence, presumably, Swiss identity) solely on EU membership 71

lives up to Switzerlands position in the global political and economic system (see Linder 2005: 381). The end of the Cold War and the increasing importance of regional and global collective security systems has rendered Switzerlands neutrality more or less obsolete no matter whether Switzerland decides to join the EU or not. While the autonomous implementation of EU law allows for the preservation of formal sovereignty, this is not the case for material sovereignty. Global markets are becoming increasingly integrated. The resulting competitive pressure acts on a global scale and is not limited to the EU. Yet, whereas the EU member states (which taken together form the worlds largest market) possess substantial leverage in regional and global institutions regulating this process, Switzerland is forced to follow behind the superpowers and particularly the EU in order to protect its interests. Whether standing apart from the EU really protects Swiss sovereignty is consequently an open question. It can thus be argued that globalization, and not EU membership, has been shifting decision-making authority away from the nation state to international and supranational institutions. The same trend can be observed domestically, where the Swiss national executive is gaining competences that were previously the domain of parliament, interest groups, and cantonal and municipal institutions. This shift undoubtedly causes tensions between federal and directdemocratic decision-making structures and international or supranational institutions. If the public debate were guided towards the question of how Switzerland can best safeguard social welfare, prosperity, environmental protection, and sovereignty in the face of these global rather than EU-induced political and economic changes, EU membership might well appear more beneficial than it does in the current debate, which is dominated by the analysis of the short-term economic advantages and disadvantages of such a policy decision.

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