/swit"seuhr leuhnd/, n.
a republic in central Europe. 7,248,984; 15,944 sq. mi. (41,294 sq. km). Cap.: Bern. French, Suisse. German, Schweiz. Italian, Svizzera. Latin, Helvetia.

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Introduction Switzerland
Background: Switzerland's independence and neutrality have long been honored by the major European powers and Switzerland was not involved in either of the two World Wars. The political and economic integration of Europe over the past half century, as well as Switzerland's role in many UN and international organizations has strengthened Switzerland's ties with its neighbors. Switzerland is active in many UN and international organizations, but retains a strong commitment to neutrality. Geography Switzerland -
Location: Central Europe, east of France, north of Italy
Geographic coordinates: 47 00 N, 8 00 E
Map references: Europe
Area: total: 41,290 sq km water: 1,520 sq km land: 39,770 sq km
Area - comparative: slightly less than twice the size of New Jersey
Land boundaries: total: 1,852 km border countries: Austria 164 km, France 573 km, Italy 740 km, Liechtenstein 41 km, Germany 334 km
Coastline: 0 km (landlocked)
Maritime claims: none (landlocked)
Climate: temperate, but varies with altitude; cold, cloudy, rainy/snowy winters; cool to warm, cloudy, humid summers with occasional showers
Terrain: mostly mountains (Alps in south, Jura in northwest) with a central plateau of rolling hills, plains, and large lakes
Elevation extremes: lowest point: Lake Maggiore 195 m highest point: Dufourspitze 4,634 m
Natural resources: hydropower potential, timber, salt
Land use: arable land: 10.57% permanent crops: 0.61% other: 88.82% (1998 est.)
Irrigated land: 250 sq km (1998 est.)
Natural hazards: avalanches, landslides, flash floods Environment - current issues: air pollution from vehicle emissions and open-air burning; acid rain; water pollution from increased use of agricultural fertilizers; loss of biodiversity Environment - international party to: Air Pollution, Air
agreements: Pollution-Nitrogen Oxides, Air Pollution-Persistent Organic Pollutants, Air Pollution-Sulphur 85, Air Pollution-Sulphur 94, Air Pollution-Volatile Organic Compounds, Antarctic Treaty, Biodiversity, Climate Change, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Marine Dumping, Marine Life Conservation, Nuclear Test Ban, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands, Whaling signed, but not ratified: Antarctic- Environmental Protocol, Climate Change-Kyoto Protocol, Law of the Sea
Geography - note: landlocked; crossroads of northern and southern Europe; along with southeastern France and northern Italy, has the highest elevations in Europe People Switzerland
Population: 7,301,994 (July 2002 est.)
Age structure: 0-14 years: 16.8% (male 629,513; female 597,472) 15-64 years: 67.7% (male 2,512,273; female 2,433,396) 65 years and over: 15.5% (male 461,722; female 667,618) (2002 est.)
Population growth rate: 0.24% (2002 est.)
Birth rate: 9.84 births/1,000 population (2002 est.)
Death rate: 8.79 deaths/1,000 population (2002 est.)
Net migration rate: 1.37 migrant(s)/1,000 population (2002 est.)
Sex ratio: at birth: 1.05 male(s)/female under 15 years: 1.05 male(s)/female 15-64 years: 1.03 male(s)/female 65 years and over: 0.69 male(s)/ female total population: 0.97 male(s)/ female (2002 est.)
Infant mortality rate: 4.42 deaths/1,000 live births (2002 est.) Life expectancy at birth: total population: 79.86 years female: 82.89 years (2002 est.) male: 76.98 years
Total fertility rate: 1.47 children born/woman (2002 est.) HIV/AIDS - adult prevalence rate: 0.46% (1999 est.) HIV/AIDS - people living with HIV/ 17,000 (1999 est.)
HIV/AIDS - deaths: 150 (1999 est.)
Nationality: noun: Swiss (singular and plural) adjective: Swiss
Ethnic groups: German 65%, French 18%, Italian 10%, Romansch 1%, other 6%
Religions: Roman Catholic 46.1%, Protestant 40%, other 5%, none 8.9% (1990)
Languages: German (official) 63.7%, French (official) 19.2%, Italian (official) 7.6%, Romansch 0.6%, other 8.9%
Literacy: definition: age 15 and over can read and write total population: 99% (1980 est.) male: NA% female: NA% Government Switzerland
Country name: conventional long form: Swiss Confederation conventional short form: Switzerland local short form: Schweiz (German), Suisse (French), Svizzera (Italian) local long form: Schweizerische Eidgenossenschaft (German), Confederation Suisse (French), Confederazione Svizzera (Italian)
Government type: federal republic
Capital: Bern Administrative divisions: 26 cantons (cantons, singular - canton in French; cantoni, singular - cantone in Italian; kantone, singular - kanton in German); Aargau, Appenzell Ausser-Rhoden, Appenzell Inner-Rhoden, Basel- Landschaft, Basel-Stadt, Bern, Fribourg, Geneve, Glarus, Graubunden, Jura, Luzern, Neuchatel, Nidwalden, Obwalden, Sankt Gallen, Schaffhausen, Schwyz, Solothurn, Thurgau, Ticino, Uri, Valais, Vaud, Zug, Zurich
Independence: 1 August 1291 (Founding of the Swiss Confederation)
National holiday: Founding of the Swiss Confederation, 1 August (1291)
Constitution: 29 May 1874
Legal system: civil law system influenced by customary law; judicial review of legislative acts, except with respect to federal decrees of general obligatory character; accepts compulsory ICJ jurisdiction, with reservations
Suffrage: 18 years of age; universal
Executive branch: chief of state: President Kasper VILLIGER (since 1 January 2002); Vice President Pascal COUCHEPIN (since 1 January 2002); note - the president is both the chief of state and head of government head of government: President Kasper VILLIGER (since 1 January 2002); Vice President Pascal COUCHEPIN (since 1 January 2002); note - the president is both the chief of state and head of government cabinet: Federal Council or Bundesrat (in German), Conseil Federal (in French), Consiglio Federale (in Italian) elected by the Federal Assembly from among its own members for a four-year term elections: president and vice president elected by the Federal Assembly from among the members of the Federal Council for one-year terms that run concurrently; election last held 5 December 2001 (next to be held NA December 2002) election results: Kasper VILLIGER elected president; percent of Federal Assembly vote - 74.4%; Pascal COUCHEPIN elected vice president; percent of legislative vote - 58.5%
Legislative branch: bicameral Federal Assembly or Bundesversammlung (in German), Assemblee Federale (in French), Assemblea Federale (in Italian) consists of the Council of States or Standerat (in German), Conseil des Etats (in French), Consiglio degli Stati (in Italian) (46 seats - members serve four-year terms) and the National Council or Nationalrat (in German), Conseil National (in French), Consiglio Nazionale (in Italian) (200 seats - members are elected by popular vote on the basis of proportional representation to serve four-year terms) elections: Council of States - last held NA 1999 (each canton determines when the next election will be held); National Council - last held 24 October 1999 (next to be held NA October 2003) election results: Council of States - percent of vote by party - NA%; seats by party - FDP 18, CVP 15, SVP 7, SPS 6; National Council - percent of vote by party - SPS 22.5%, SVP 22.6%, FDP 19.9%, CVP 15.8%, other small parties all under 5%; seats by party - SPS 51, SVP 44, FDP 43, CVP 35, Green Party 9, other small parties 18
Judicial branch: Federal Supreme Court (judges elected for six-year terms by the Federal Assembly) Political parties and leaders: Christian Democratic People's Party (Christichdemokratische Volkspartei der Schweiz or CVP, Parti Democrate- Chretien Suisse or PDC, Partito Democratico-Cristiano Popolare Svizzero or PDC, Partida Cristiandemocratica dalla Svizra or PCD) [Philipp STAEHELIN, president]; Green Party (Grune Partei der Schweiz or Grune, Parti Ecologiste Suisse or Les Verts, Partito Ecologista Svizzero or I Verdi, Partida Ecologica Svizra or La Verda) [Ruth GENNER and Patrice MUGNY, co-presidents]; Radical Free Democratic Party (Freisinnig- Demokratische Partei der Schweiz or FDP, Parti Radical-Democratique Suisse or PRD, Partitio Liberal- Radicale Svizzero or PLR) [Gerold BUEHRER, president]; Social Democratic Party (Sozialdemokratische Partei der Schweiz or SPS, Parti Socialist Suisse or PSS, Partito Socialista Svizzero or PSS, Partida Socialdemocratica de la Svizra or PSS) [Christiane BRUNNER, president]; Swiss People's Party (Schweizerische Volkspartei or SVP, Union Democratique du Centre or UDC, Unione Democratica de Centro or UDC, Uniun Democratica dal Center or UDC) [Ueli MAURER, president]; and other minor parties Political pressure groups and NA
leaders: International organization ACCT, AfDB, AsDB, Australia Group,
participation: BIS, CCC, CE, CERN, EAPC, EBRD, ECE, EFTA, ESA, FAO, G-10, IADB, IAEA, IBRD, ICAO, ICC, ICFTU, ICRM, IDA, IEA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, ISO, ITU, LAIA (observer), MONUC, NAM (guest), NEA, NSG, OAS (observer), OECD, OPCW, OSCE, PCA, PFP, UN (observer), UNCTAD, UNESCO, UNHCR, UNIDO, UNITAR, UNMEE, UNMIBH, UNMIK, UNMOP, UNOMIG, UNTSO, UNU, UPU, WCL, WHO, WIPO, WMO, WToO, WTrO, ZC Diplomatic representation in the US: chief of mission: Ambassador Christian BLICKENSTORFER consulate(s): Boston consulate(s) general: Atlanta, Chicago, Houston, Los Angeles, New York, and San Francisco FAX: [1] (202) 387-2564 telephone: [1] (202) 745-7900 chancery: 2900 Cathedral Avenue NW, Washington, DC 20008 Diplomatic representation from the chief of mission: Ambassador Mercer
US: REYNOLDS III embassy: Jubilaeumstrasse 93, 3001 Bern mailing address: use embassy street address telephone: [41] (031) 357 70 11 FAX: [41] (031) 357 73 44
Flag description: red square with a bold, equilateral white cross in the center that does not extend to the edges of the flag Economy Switzerland -
Economy - overview: Switzerland is a prosperous and stable modern market economy with a per capita GDP higher than that of the big western European economies. The Swiss in recent years have brought their economic practices largely into conformity with the EU's to enhance their international competitiveness. Although the Swiss are not pursuing full EU membership in the near term, in 1999 Bern and Brussels signed agreements to further liberalize trade ties. They continue to discuss further areas for cooperation. Switzerland remains a safe haven for investors, because it has maintained a degree of bank secrecy and has kept up the franc's long-term external value. The GDP growth rate dipped to 1.6% in 2001, and the government projects that it will slow further to 1.3% in 2002.
GDP: purchasing power parity - $226 billion (2001 est.)
GDP - real growth rate: 1.6% (2001 est.)
GDP - per capita: purchasing power parity - $31,100 (2001 est.) GDP - composition by sector: agriculture: 2% industry: 34% services: 64% (2001 est.) Population below poverty line: NA% Household income or consumption by lowest 10%: 2.8%
percentage share: highest 10%: 25.2% (1992) Distribution of family income - Gini 33.1 (1992)
index: Inflation rate (consumer prices): 1% (2001)
Labor force: 4 million (2001) Labor force - by occupation: services 69.1%, industry 26.3%, agriculture 4.6% (1998)
Unemployment rate: 1.8% (2001)
Budget: revenues: $30 billion expenditures: $30 billion, including capital expenditures of $NA (2001 est.)
Industries: machinery, chemicals, watches, textiles, precision instruments Industrial production growth rate: 3.2% (2001) Electricity - production: 64.182 billion kWh (2000) Electricity - production by source: fossil fuel: 3.96% hydro: 56.81% other: 2.3% (2000) nuclear: 36.93% Electricity - consumption: 52.62 billion kWh (2000)
Electricity - exports: 31.4 billion kWh (2000)
Electricity - imports: 24.33 billion kWh (2000)
Agriculture - products: grains, fruits, vegetables; meat, eggs
Exports: $91.4 billion (f.o.b., 2001)
Exports - commodities: machinery, chemicals, metals, watches, agricultural products
Exports - partners: EU 59% (Germany 21%, France 9%, Italy 8%, UK 6%, Austria 3%), US 13%, Japan 4% (2000)
Imports: $91.4 billion (f.o.b., 2001)
Imports - commodities: machinery, chemicals, vehicles, metals; agricultural products, textiles
Imports - partners: EU 74% (Germany 29%, France 10%, Italy 9%, Netherlands 6%, UK 6%), US 8%, Japan 3% (2000)
Debt - external: $NA
Economic aid - donor: ODA, $1.1 billion (1995)
Currency: Swiss franc (CHF)
Currency code: CHF
Exchange rates: Swiss francs per US dollar - 1.6668 (January 2002), 1.6876 (2001), 1.6888 (2000), 1.5022 (1999), 1.4498 (1998), 1.4513 (1997)
Fiscal year: calendar year Communications Switzerland Telephones - main lines in use: 4.82 million (1998) Telephones - mobile cellular: 1.967 million (1999)
Telephone system: general assessment: excellent domestic and international services domestic: extensive cable and microwave radio relay networks international: satellite earth stations - 2 Intelsat (Atlantic Ocean and Indian Ocean) Radio broadcast stations: AM 4, FM 113 (plus many low power stations), shortwave 2 (1998)
Radios: 7.1 million (1997) Television broadcast stations: 115 (plus 1,919 repeaters) (1995)
Televisions: 3.31 million (1997)
Internet country code: .ch Internet Service Providers (ISPs): 44 (Switzerland and Liechtenstein) (2000)
Internet users: 3.41 million (2001) Transportation Switzerland
Railways: total: 4,406 km standard gauge: 3,440 km 1.435- m gauge dual gauge: 56 km 1.435-m and 1.000- m gauges (3 rail system) note: Swiss railways are virtually all electrified (2001) narrow gauge: 900 km 1.000-m gauge; 10 km 0.800-m gauge
Highways: total: 71,059 km (including 1,638 km of expressways) paved: 71,059 km unpaved: 0 km (1999)
Waterways: 65 km note: The Rhine carries heavy traffic on the Basel-Rheinfelden and Schaffhausen-Bodensee stretches; there are also 12 navigable lakes
Pipelines: crude oil 314 km; natural gas 1,506 km
Ports and harbors: Basel
Merchant marine: total: 26 ships (1,000 GRT or over) totaling 509,943 GRT/896,309 DWT ships by type: bulk 15, cargo 6, chemical tanker 4, petroleum tanker 1 note: includes some foreign-owned ships registered here as a flag of convenience:, United Kingdom 6, United States 1 (2002 est.)
Airports: 66 (2001) Airports - with paved runways: total: 42 over 3,047 m: 3 2,438 to 3,047 m: 5 914 to 1,523 m: 8 under 914 m: 15 (2001) 1,524 to 2,437 m: 11 Airports - with unpaved runways: total: 24 under 914 m: 24 (2001)
Heliports: 1 (2001) Military Switzerland
Military branches: Army, Air Force, Frontier Guards, Fortification Guards Military manpower - military age: 20 years of age (2002 est.) Military manpower - availability: males age 15-49: 1,841,867 (2002 est.) Military manpower - fit for military males age 15-49: 1,561,689 (2002
service: est.) Military manpower - reaching military males: 42,597 (2002 est.)
age annually: Military expenditures - dollar $2.548 billion (FY01)
figure: Military expenditures - percent of 1% (FY01)
GDP: Transnational Issues Switzerland Disputes - international: none
Illicit drugs: because of more stringent government regulations, used significantly less as a money-laundering center; transit country for and consumer of South American cocaine and Southwest Asian heroin

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officially Swiss Confederation

Landlocked country, central Europe.

Area: 15,940 sq mi (41,284 sq km). Population (2002 est.): 7,282,000. Capital: Bern. The population is German, French, and Italian. Languages: German, French, Italian, and Romansh (all official, with Romansh used locally). Religions: Roman Catholicism (about 45%), Protestantism (40%), Islam, Orthodox Christian. Currency: Swiss Franc. Switzerland is divided into three regions: the meadow-covered Jura Mountains; the central Mittelland, a rich agricultural and urbanized area; and the lofty crags of the Alps. It is one of the world's major financial centres; its economy is based largely on international trade and banking, as well as light and heavy industries. Manufactures include watches, precision instruments, machinery, and chemicals. Tourism and agriculture are also important; products include grains, sugar beets, fruits and vegetables, dairy products, chocolate, and wine. Despite diverse ethnic groups, religions, and languages, Switzerland has maintained the world's oldest democracy for some 700 years. It is a federal state with two legislative houses; its head of state and government is the president. The original inhabitants were the Helvetians, who were conquered by the Romans in the 1st century BC. Germanic tribes penetrated the region from the 3rd to the 6th century AD, and Muslim and Magyar raiders ventured in during the 10th century. It came under the rule of the Franks in the 9th century and the medieval empire (later to become the Holy Roman Empire) in the 11th century. In 1291 three cantons formed an anti-Habsburg league that became the nucleus of the Swiss Confederation. It was a centre of the Reformation, which divided the confederation and led to a period of political and religious conflict. The French organized Switzerland as the Helvetic Republic in 1798. In 1815 the Congress of Vienna recognized Swiss independence and guaranteed its neutrality. A new federal state was formed in 1848 with Bern as the capital. Switzerland remained neutral in both World War I and World War II and has continued to defend this neutrality. It joined the European Free Trade Association in 1960, but it has opted against joining the European Union. It joined the United Nations in 2002.

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▪ 2009

41,284 sq km (15,940 sq mi)
(2008 est.): 7,617,000
Head of state and government:
President Pascal Couchepin

      The legendary stability of the Swiss banking system was shaken in 2008 when the government had to intervene in October with a package of nearly $60 billion to rescue the country's biggest bank, UBS AG. Both UBS and the second largest bank, Credit Suisse, were hard hit by bad loans originating in the United States. UBS Chairman Marcel Ospel resigned in April after the bank reported a first-quarter net loss of 12 billion Swiss francs (about $12 billion). The other 300-odd banks in Switzerland were less affected, thanks to strong deposits. With a high rate of gross national savings—more than one-third of GDP—the Swiss economy looked set to weather the global economic turmoil better than many European neighbours.

      Switzerland also continued to thrive owing to its nonmembership in the European Union. The Lake Geneva area in particular used tax incentives and other perks to entice American multinationals seeking a European base, to the frustration of the EU and of local Swiss residents who faced an acute lack of affordable housing because of the influx of Americans. The government defended banking-secrecy laws against EU attempts to uncover the identity of tax evaders who had stashed their money in Swiss accounts, but Bern continued to hand over “ill-gotten gains” from dictators and other corrupt foreign officials, including $74 million paid to the Mexican government from bank accounts linked to the brother of former Mexican president Carlos Salinas de Gortari.

      Switzerland's consensus style of governance became more harmonious after the December 2007 ouster of Christoph Blocher of the right-wing Swiss People's Party (SVP) from the ruling four-party coalition. The SVP—which won the most votes in the 2007 general election—was left without a seat in the seven-member cabinet until December, when a close Blocher ally was narrowly elected. The SVP agitated from the sidelines, backing referenda, such as one to ban the construction of minarets from Islamic prayer houses. Voters in June rejected proposals by the SVP to make it harder for foreigners to gain citizenship. A November referendum backed government proposals for a permanent program to distribute controlled quantities of heroin at approved centres to 1,300 addicts who had failed other therapies. The heroin scheme started as an experiment in 1994 and had helped rehabilitate addicts and cut crime, as addicts no longer needed to steal to finance their habit.

      Finance Minister Hans-Rudolf Merz, who was due to take over the rotating presidency in 2009, suffered a serious heart attack in September. Defense Minister Samuel Schmid announced his resignation, ostensibly on health grounds. He came under pressure after he lost his power base by leaving the SVP. The parliament rejected Schmid's proposals for an armaments package, and he was accused of having covered up allegations of sexual harassment against armed forces chief Roland Nef, who resigned in July. The head of the Swiss air force also quit after five airmen drowned during a team-building exercise in June.

      A Swiss energy company and Iran's state-owned National Iranian Gas Export Co. in March signed a multibillion-dollar deal for the provision of natural gas. This prompted protests from the World Jewish Congress that Iran might use the funds to buy weapons for use against Israel. The U.S. also voiced concern, but the Swiss government replied that it was a neutral country with an independent foreign policy.

       Libya halted oil shipments and withdrew its money from Swiss banks in fury at the July arrest of Muammar al-Qaddafi's son at a luxury Geneva hotel on allegations that he had beaten two servants. Hannibal al-Qaddafi returned home after his release on bail, but the incident fueled a diplomatic crisis.

      The art world was rocked in February when four Impressionist paintings (by Monet, van Gogh, Cézanne, and Degas), with an estimated value of 180 million Swiss francs (about $163 million), were stolen from a Zürich art gallery. The Monet and van Gogh paintings were recovered within days.

Clare Kapp

▪ 2008

41,284 sq km (15,940 sq mi)
(2007 est.): 7,607,000
Head of state and government:
President Micheline Calmy-Rey

      Switzerland's normally predictable political landscape was shaken to the foundations by the fallout from the Oct. 21, 2007, general elections which gave the nationalist Swiss People's Party (SVP) the highest vote ever recorded for a single Swiss party. The SVP received 29% of the vote (up from 26.7% in the 2003 election) and increased its representation by 7 seats to give it the largest number of seats (62) in the 200-seat National Council. The left-of-centre Social Democrats fell to 19.5% (down from 23.3%) and finished in second place with 43 seats, partly owing to a strong showing from the Green Party, which improved from 7.4% (13 seats) in 2003 to 9.6% (20 seats) in 2007. The centrist Free Democratic Party got 15.6% of the vote (down from 17.3%), and the Christian People's Party stayed steady with 14.6%. Turnout was a poor 48.9%, which reflected widespread apathy in a country known for holding frequent referenda on a diverse range of issues.

 The party campaigned under the slogan “My Home. Our Switzerland, " and with a poster of three white sheep kicking out one black sheep—symbolizing the party's proposals to expel entire immigrant families if one member broke the law, which was in tune with the party's belief that foreigners were to blame for much of the country's crime. About 1.6 million of Switzerland's 7.6 million inhabitants were foreign—although the high total partly reflected tougher citizenship criteria than in many other countries.

      The SVP was outmaneuvered when its leading light, billionaire businessmen and virulent EU opponent Christoph Blocher, failed to gain reelection as justice minister (at a joint sitting of the two chambers of the Federal Assembly on December 12). In the biggest upset since the formation of the four-party coalition in 1959, the Federal Assembly instead elected Eveline Widmer-Schlumpf, from the SVP's moderate wing, to the seven-member federal executive. Blocher disowned Widmer-Schlumpf and said that the SVP would in future behave as an opposition party and try to thwart government plans through referenda. Blocher's sudden exit from the cabinet looked set to ease relations with the EU after antagonism over Switzerland's refusal to amend its corporate taxation policy.

      Switzerland showed no sign of wanting to join the EU, but its role as a transport hub at the heart of Europe was cemented with the opening in June of the transalpine Lötschberg Base Tunnel. The world's longest overland tunnel—a 34.6-km (21.5-mi) rail link—took eight years to build, and when full rail service began in December, it slashed the train journey between Germany and Italy from 31/2 hours to less than 2 hours. An even more ambitious project—the 57-km (35-mi) Gotthard Base Tunnel—was scheduled for completion by 2017 in a bid to move heavy trucks off the road and onto the rails.

      A Zürich court in June acquitted all 19 top executives implicated in the collapse of the former flag carrier Swissair and awarded them compensation of more than 3 million Swiss francs (about $2.5 million), which prompted an outcry among the thousands of employees who lost their jobs and pensions when Swissair was grounded abruptly in October 2001 after being unable to pay for fuel and landing fees.

      Swiss economic growth was forecast at a better-than-expected 2.6%. A government expert panel, however, warned that prospects for 2008 were highly uncertain.

Clare Kapp

▪ 2007

41,284 sq km (15,940 sq mi)
(2006 est.): 7,533,000
Head of state and government:
President Moritz Leuenberger

      Switzerland in 2006 continued its balancing act with the European Union, consolidating economic links with the trade bloc while preserving its own political sovereignty. In its Europe 2006 Report, issued in June, the Federal Council ruled out the possibility of joining the EU in the foreseeable future and stated that national interests were best served by intensifying bilateral agreements in such sectors as transport, energy, and labour and its membership in the passport-free Schengen zone.

      This strategy continued to bear economic fruit. Swiss GDP was expected to grow at 2.7% (compared with the 2.5% forecast for the euro zone), with unemployment at 3.3%. The Swiss Market Index attained record highs, and on the basis of its efficient institutions, infrastructure, and innovation, Switzerland jumped to first place from fourth in the World Economic Forum's Global Competitiveness survey among business leaders.

      In a concession to Brussels, the government agreed to grant 1 billion Swiss francs (1 Swiss franc = about $0.80) to the EU's new Eastern European members. Almost half of the money was destined for Poland to help with infrastructure and economic reforms. The government sought to sell the plan to its independent electorate, asserting that the scheme would benefit not only Eastern Europe but also, ultimately, the Swiss. It was relieved when voters approved the deal in a November 26 referendum by a narrow 53% majority.

      While opening its doors to more EU citizens, Switzerland ratified tight new immigration and asylum laws that effectively blocked unskilled labour from outside Europe and clamped down on refugees. In a September referendum nearly 68% of those voting endorsed the stricter rules, which the government said would speed up repatriation of nonrefugees and clamp down on fraudulent applications. The measures included a requirement that asylum seekers produce valid identity papers in 48 hours. The UN High Commissioner for Refugees and other critics condemned the new law as one of Europe's strictest; judged that it was unnecessary, given that asylum applications had reached a 20-year low of 10,000; and protested that the identity-papers rule was particularly unfair because genuine victims of persecution and war often had no documents.

      In the same referendum, voters rejected a proposal by labour unions and retirees to redirect 1.5 billion Swiss francs per year from Swiss National Bank profits to help the country's overburdened pension system.

      A report issued by the World Health Organization and the Organisation for Economic Co-operation and Development (OECD) found that the Swiss spent 11.5% of GDP on health care, compared with an average of 8.8% in other OECD countries, but that the quality of care was no better. The report urged Switzerland to try to cut costs and spend more on prevention rather than on cures.

      The Swiss Federal Tribunal finally approved a 2002 U.S. request to provide details of any bank accounts suspected of being used for terrorist funding. The Federal Prosecutor's Office revealed in June that intelligence officials had thwarted a plan by an Algerian group with reported links to al-Qaeda to shoot down an Israeli passenger flight taking off from Geneva.

      The impact of global warming on the country's trademark mountains was tangible in the hot summer months. About 600,000 cu m (20 million cu ft) of rock fell from the Eiger peak in July after the glacial ice holding the material together melted. The incident highlighted warnings from the European Environment Agency that three-quarters of Switzerland's glaciers were at risk of melting by 2050.

Clare Kapp

▪ 2006

41,284 sq km (15,940 sq mi)
(2005 est.): 7,519,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Samuel Schmid

      Fiercely independent Switzerland edged closer to the European Union in June 2005 when voters approved by 55–45% the country's participation in the passport-free Schengen zone. Pres. Samuel Schmid hailed the outcome of the referendum as a vote of confidence in the government's policy to promote closer links with the EU while retaining full political sovereignty. Switzerland was due to join the Schengen zone under an arrangement that would allow it to retain customs controls. The pro-European mood also prevailed in a September vote that approved a proposal to allow citizens of the 10 new EU members to work in Switzerland. The scheme would extend an agreement to open labour markets that was signed in 1999 with the original 15 EU members. Opponents of the move warned that Eastern European labourers would take jobs from higher-paid Swiss workers.

      In another key referendum 58% voted in favour of granting more rights to registered same-sex couples, which would thus allow them to receive the same tax and pension status as married couples. The referendum stopped short of letting same-sex couples adopt children or undergo fertility treatment.

 Swiss engineers completed drilling for the 34.6-km (1 km = 1.6 mi) Lötschberg tunnel, which would link northern and southern Europe and cut travel times between Germany and Italy when it opened in 2007. The more ambitious 57-km Gotthard tunnel remained under construction. The aim of the two multibillion-dollar construction projects was to shift heavy trucks in transit through Europe from the roads to the railways and ease congestion on Alpine highways.

      The Swiss railway system—famous for its punctuality—in June suffered an embarrassing and unprecedented power failure that halted the entire network for several hours and stranded tens of thousands of commuters and tourists. Swiss International Airlines, which accumulated losses of 2 billion Swiss francs (about $1.7 billion) in the three years of its existence, was sold to Germany's Lufthansa during the year. The newly integrated company announced plans for scaled-down European short-haul flights to cut costs.

      Many Swiss were relieved at the news that another national symbol—the Swiss army knife—was to remain in local hands after Victorinox purchased its smaller, struggling rival, Wenger. The two companies, which previously had shared the rights to supply the Swiss army, produced nearly 26 million knives annually. Sales fell after the Sept. 11, 2001, terrorist attacks in the U.S., as tighter security measures led to airline bans on pocket knives, which had been a popular item at airport stores.

      In a long-running money-laundering scandal, Switzerland agreed to return to Nigeria $290 million in funds held in accounts linked to the late dictator Sani Abacha. The announcement came after Nigeria agreed to allow the World Bank to monitor the funds to ensure that the money was spent on development projects in areas such as health, education, and infrastructure. A second installment of $170 million was due to be sent back to Nigeria at a subsequent date once the assets had been converted to cash. The funds, allegedly plundered from Nigerian state coffers by Abacha and transferred to Swiss bank accounts, had been held by Switzerland since 1999.

      The sluggish economies in most EU countries—the main export markets for Switzerland—dashed hopes of economic revival in 2005, even though the weakening of the Swiss franc against the U.S. dollar helped make Swiss exports more competitive. Government figures showed that GDP grew by only 0.9%, largely because of buoyant consumer demand, compared with initial predictions of 1.5%. Unemployment remained below 4%.

Clare Kapp

▪ 2005

41,284 sq km (15,940 sq mi)
(2004 est.): 7,392,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Joseph Deiss

      As 10 new members joined the European Union on May 1, 2004, Switzerland remained resolutely outside, but the country was prodded into concessions toward greater European integration by economic, trade, and political realities. The EU and Switzerland in March signed a bilateral package to make it harder for EU citizens to evade domestic taxes by having a Swiss bank account. Switzerland agreed to impose taxes on deposits of EU citizens—starting at 15% and rising to 35% after 2010—and to transfer the revenue in lump sums to the respective European nations, which would thereby preserve the anonymity of the depositors and uphold cherished Swiss banking secrecy. In return, Swiss citizens won the right to travel more freely in the EU. The EU was forced to postpone the starting date of the clampdown on cross-border tax evasion by six months to July 1, 2005, because Switzerland and Liechtenstein said that they needed more time to prepare.

      EU frustration was aggravated by Switzerland's new justice minister, Christoph Blocher, an outspoken critic of the EU and the UN. Blocher had been named to the seven-member federal executive in December 2003 after his nationalist Swiss People's Party (SVP) made sweeping gains in the October 2003 general elections. His ministerial responsibilities were expected to give Blocher a pivotal role in the anticipated June 2005 referendum on the so-called Schengen/Dublin agreements on border controls.

      The presence of Blocher—a combative billionaire industrialist—crippled the consensus politics that had shaped cabinet decisions since 1959. This was particularly evident in a September 26 referendum in which an unexpected 57% majority rejected government proposals to give automatic citizenship to some 80,000 third-generation immigrants and 52% voted against making it easier for nearly 120,000 longtime residents to gain Swiss nationality. About one in five of Switzerland's 7.4 million inhabitants was a foreigner, partly because of the strict citizenship laws. In the run-up to the referendum, Blocher's SVP successfully played on simmering resentment against immigrants from the Balkans—ethnic Albanians in particular—as well as fear of terrorism. The other three coalition parties were furious, and Economics Minister (and former president) Pascal Couchepin, of the centrist Radical Democrats, accused Blocher of being a threat to Swiss democracy.

      Swiss authorities made arrests of at least eight alleged al-Qaeda members suspected of involvement in attacks against foreigners in Saudi Arabia. Officials also handed over a number of bank documents to the U.S. in connection with the war on terrorism, although there were no signs that the Swiss financial centre had acted as a major conduit for terrorist funds. Authorities froze some 180 million Swiss francs (about $150 million) in Iraqi assets following a UN Security Council decision to widen sanctions against people with suspected links to former Iraqi president Saddam Hussein.

      The official State Secretariat for the Economy predicted a growth rate of 1.8% for 2004, with a stronger performance expected for 2005. Major Swiss-based concerns, such as Nestlé foods, pharmaceutical giants Novartis and Roche, and the Credit Suisse and UBS banking groups, reported healthy third-quarter results.

Clare Kapp

▪ 2004

41,284 sq km (15,940 sq mi)
(2003 est.): 7,336,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Pascal Couchepin

      Switzerland's 44-year-old “magic formula” system of government was thrown into disarray following sweeping gains by the nationalist Swiss People's Party (SVP) in the Oct. 19, 2003, general elections. With its anti-immigration, anti-European Union campaign, the SVP won 26.6% of the vote to become the largest force in the Federal Assembly. The left-of-centre Social Democrats were in second place with 23.3%, while the centrist Radical Democrats and Christian Democrats trailed with 17.3% and 14.4%, respectively. The SVP—the junior member of the governing coalition since 1959, with one seat on the seven-member federal executive—immediately staked its claim to an extra cabinet seat for party leader Christoph Blocher. The billionaire industrialist's penchant for populist and inflammatory rhetoric looked set to spell the end of Switzerland's polite consensus politics and of any lingering hopes that the country would join the EU.

      Turnout at the general election was just 44.5%—an increase from 1999 but still below the European average. Many Swiss attributed their apathy to the sheer number of elections and referendums held under the nation's direct-democracy system, whereby 50,000 signatures could force a national vote. In a marathon day at the ballot box in May, the 4.7-million-strong electorate had been called to decide on nine different proposals—the highest number in 137 years. Voters had endorsed government plans to modernize the armed forces and to overhaul the country's civil-defense system, notably ending the Cold War-era requirement that all new buildings contain nuclear bunkers. They had rejected two proposals to scrap or freeze nuclear energy, a plan to designate four automobile-free Sundays per year, universal access to public buildings for the disabled, planned changes in health-insurance funding, a tenants' rights scheme, and an increase in apprenticeships.

      The SVP threatened to force a referendum to frustrate government plans to make it easier for foreign nationals to become citizens. The party vowed to fight a Supreme Court ruling that public votes on citizenship applications were unconstitutional. The Supreme Court judgment in July came in the wake of a notorious decision in 2000 by natives of the town of Emmen, who rejected citizenship applications by 48 people, mostly from former Yugoslavia and Turkey, while accepting those from Italians. About one-fifth of Switzerland's residents were foreigners—one of the highest proportions in Europe—partly because of restrictions on naturalization.

      Fearing castigation from neighbouring countries, the National Council in September blocked the government's proposed narcotics-law revision. This change would have decriminalized the consumption and, under certain conditions, the production and sale of cannabis and would have provided a permanent legal basis for the state prescription of heroin to some 1,300 severe addicts.

      Swiss tolerance of assisted suicide came under increasing scrutiny because of the activities of Dignitas, an organization that helped a steady stream of terminally ill foreigners die with an overdose of barbiturates at its Zürich headquarters. Dignitas insisted that it was acting out of compassion for the terminally ill who had been denied the right to die with dignity in their home countries. Although Swiss authorities were unhappy with headlines likening Zürich to a city of death, their powers were limited by a Swiss law that allowed trained counselors to help with suicide.

      The Swiss economy limped through the year, shrinking slightly by 0.3% according to government figures, but unemployment remained below 4% and inflation was about 0.5%. Fears concerning the bankruptcy of the national airline, swiss, were eased when it was admitted to the protective umbrella of the OneWorld alliance, dominated by British Airways.

Clare Kapp

▪ 2003

41,284 sq km (15,940 sq mi)
(2002 est.): 7,282,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Kaspar Villiger

      Switzerland eased away from self-imposed isolation when it joined the United Nations on Sept. 10, 2002, following a referendum in March in which 55% of the electorate voted in favour of UN membership. Pres. Kaspar Villiger and other government members argued that rejection would be disastrous for the country's international standing and that membership was compatible with Swiss neutrality. An overwhelming majority had voted against UN membership in 1986 out of fears that national sovereignty would be weakened. Switzerland had long been an active member of specialized international agencies such as the World Health Organization, and Geneva served as the UN European headquarters.

      Switzerland showed little inclination, however, to follow the 10 other countries accepted for accession negotiations with the European Union. Anti-EU sentiment was heightened as a result of British-led pressure to relax banking secrecy and crack down on tax evasion—which was not an offense in Switzerland. The EU wanted to impose a tax on income earned on savings and investments abroad, which necessitated the introduction of an information-swapping system. Switzerland offered to withhold taxes on interest and dividend payments to EU residents and give it to the EU—but without identifying the depositors. Swiss banks said even that concession would hurt them and warned that abolition of banking secrecy would put 20,000 jobs at risk. Switzerland had earned praise from the U.S. for lifting banking secrecy in the hunt for assets linked to the al-Qaeda terrorist network—although it only found negligible sums.

      The government was embarrassed when voters killed its plan to set up a Swiss Solidarity Foundation using “excess” gold. The aim was to invest an expected 20 billion Swiss francs (about $13.5 billion) from the sale of gold reserves and spend the interest, with one-third of the money going to the Swiss social security program, a third to the foundation to help cantonal (state) governments, and a third to people in need at home or abroad. Billionaire industrialist Christoph Blocher, the country's leading nationalist, slammed the foundation as the product of foreign “blackmail” because it had been conceived in 1997 to calm international accusations that Switzerland had profited from the Holocaust. In the September 22 referendum, 52% voted against the plan, with many saying that, given the international economic climate, it would be better to keep the gold.

      Martin Ebner, Switzerland's best-known financier, was the most prominent victim of the stock-market downturn. In July he was forced to sell the controlling interest in four publicly traded investment companies as part of a restructuring of his debt-laden BZ Group. Lukas Mühlemann, the chairman and chief executive of Credit Suisse Group, the country's second largest bank, also announced that he would stand down because of its poor performance. Swiss-Swedish engineering conglomerate ABB forced out its chief, Jörgen Centerman, and then witnessed its share price collapse by about 75% in the space of a few days in late October as a result of bankruptcy fears.

      The new national airline—swiss—took to the air March 31, combining the services of the defunct Swissair and regional carrier Crossair. Federal and cantonal governments and companies led by Nestlé raised 2.75 billion francs (about $1.7 billion) to get it aloft. Swiss precision was thrown into question after its air traffic controllers admitted to being at least partly to blame for the midair collision of a Russian charter jet and a cargo plane in Swiss airspace over Germany. The crash killed 71 people, many of them school students heading for a beach vacation in Spain. (See Disasters.)

      In the closest outcome on record, a referendum on November 24 rejected by a majority of just 3,422 votes a proposal by the nationalist Swiss People's Party to keep out all but a trickle of asylum seekers. The government urged cantonal authorities to do a manual recount to ward off potential legal challenges.

      The once-a-generation national exhibition opened in May—a year behind schedule. Split between four lakeside towns, Expo.02 emphasized the avant-garde rather than the traditional. Admissions to the exhibition exceeded 10 million before it closed its doors on October 20.

Clare Kapp

▪ 2002

41,284 sq km (15,940 sq mi)
(2001 est.): 7,222,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Moritz Leuenberger

      In the worst accident of its kind that Switzerland had ever experienced, 11 people lost their lives on Oct. 24, 2001, in a head-on collision between two heavy trucks and the consequent fire in the 17-km (10.5-mi) St. Gotthard tunnel, hitherto considered as having “above-average security.” Traffic in the tunnel, a main route through the Swiss Alps between Göschenen and Airolo on the way to Italy, had increased significantly since a fire that resulted in 39 deaths closed the Mont Blanc tunnel—the principal Alpine link between France and Italy—in 1999. By the end of 2001, the Mont Blanc tunnel had reopened initially for light traffic.The Gotthard tunnel reopened on December 21. In a further accident on November 24, a Crossair plane crashed as it was on the point of landing at Zürich airport; 24 people died. (See Disasters .)

      The Swiss public was likewise traumatized by the mass killing on September 27 in the cantonal parliament of Zug. A man wearing what looked like a police uniform and armed with a grenade and an assault rifle burst into a joint session and opened fire, killing 14 people and wounding many more, before shooting himself.

      After a fairly promising start to the year, the Swiss economy was shaken by successive restructuring, entailing thousands of layoffs and bringing unemployment up to almost 2%, though inflation was at its lowest since February 1999. This culminated in the downfall of the national airline, Swissair, which since its founding in 1931 had established itself as the hallmark of Swiss efficiency. Swissair had experienced serious financial difficulties in preceding years (at a stormy shareholders meeting in April, the management was severely criticized), which were compounded by repercussions from the September 11 terrorist attacks in the U.S. Swissair grounded its fleet of 73 planes for two days in early October when two of its jets were denied fuel replenishment at London's Heathrow Airport and the company was refused further credit. Thousands of passengers were stranded. Difficult weeks followed, leading to the collapse of the Swissair group. Its subsidiary, Crossair, emerged as the national airline, taking over 52 flights from Swissair, which was granted a six-month protection against bankruptcy proceedings. Financial support was pledged by government, banks and the private sector, with UBS and Credit Suisse holding 70.5% of the share capital of Crossair.

      In a March referendum voters followed the government's advice to postpone a decision on joining the European Union to allow more time for reflection. In June voters approved by a narrow majority government proposals that Swiss soldiers serving abroad be armed. The electorate also narrowly voted to permit military training in NATO countries or common exercises with NATO troops on Swiss soil. Action for an Independent and Neutral Switzerland and other opponents expressed fears that the country might otherwise lose its neutrality and be drawn into a military entanglement. At the same time, voters accepted the repeal of an article in the constitution by which the creation of new bishoprics needed the blessing of the political authorities. In December, limitations on budgetary endebtedness were accepted, while abolishing the army was once more rejected, as were replacing the army by a peace service, imposing a tax on energy and another one on capital gains.

      Continuing its reform “Army XXI,” the Swiss cabinet decided that new military recruits would serve for 21 weeks, up from 15. Parliamentary approval of this change was taken for granted. It would apply from 2004, by which time the strength of the army would be reduced from 350,000 to 200,000, while the annual budget would remain at Sw F 4.3 billion (about $2.6 billion).

      Although a massive majority in the National Council was in favour of joining the United Nations, the final decision still depended on a referendum to be held in March 2002. By the end of 2001, the Swiss political scene had moved slightly to the right, as the Swiss People's Party had gained representation in all cantonal parliaments.

      The Federal Council opened the way to simplify the procedure for foreigners of the second and third generation to acquire Swiss nationality (subject to parliamentary approval and acceptance in a future referendum). Belgium was by the end of the year the last EU country to have ratified the bilateral agreements with Switzerland. After adjustments, due largely to some donors' being unable to meet their pledges, the Swiss national exhibition, Expo02, was expected to open as scheduled. It was already a year late.

Alan McGregor

▪ 2001

41,284 sq km (15,940 sq mi)
(2000 est.): 7,177,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Adolf Ogi (for 2000)

      With its economy in good shape and a substantial budget surplus expected, Switzerland sailed through the year 2000. The nation's exports, particularly pharmaceuticals and watches, benefited from the strong dollar. While strains were experienced in some industrial sectors, average unemployment remained under 3%. Despite a sharp rise in fuel prices, long lines at filling stations, as experienced elsewhere in Europe, were unknown. Domestic spending, however, remained cautious, largely owing to increases in health insurance premiums and rents. The Swiss franc (Sw F 1 = about $0.58) was once again viewed as a safe haven for money otherwise exposed to currency turbulence. The government firmly rejected a proposal by trade unions for an obligatory 36-hour workweek, instead of the existing 42 hours.

      Unease over the effects of climate change was heightened by the flood catastrophe in the canton of Valais (as well as areas in nearby Italy) in mid-October. In Switzerland 15 people lost their lives, 13 of them in the mountain village of Gondo, where enormous masses of rocks and mud swept away entire houses. The Rhône River burst its banks and flooded surrounding areas, sometimes to a depth of more than two metres (six feet). Thousands had to be evacuated, and the army was called in to help. Damage estimates reached Sw F 1 billion. A nationwide appeal for funds brought an unprecedentedly generous response.

      Two decisions announced by the Federal Council (the seven-member cabinet) touched off controversy. The first was a “solidarity pact” between homosexuals or lesbians, affording them certain legal rights, and the second was the “decriminalization” of the use of marijuana.

      With Switzerland edging closer to European Union (EU) membership, banking secrecy came in for particular attention. As of Jan. 1, 2001, bank secrecy (which did not cover money laundering) was being eroded in regard to Americans through application of the requirement for banks to provide the names of U.S. nationals holding investments in Swiss banks. Several banks were fined for having accepted some $600 million in deposits made on behalf of the former Nigerian dictator Sani Abacha.

      At the end of June, the Federal Council agreed to open procedures for a new attempt at joining the United Nations. More than half of the population, however, remained opposed to this, according to opinion polls. The first occasion had been in March 1986, when 75% of the people voted against it, despite the fact that Switzerland was a member of UN specialized agencies, several of which had their headquarters in Geneva. Membership in the EU continued to be opposed by an estimated two-thirds of the population. As agreed upon in negotiations, however, Switzerland moved ahead by allowing 40-ton trucks to travel through the country up to a limit of 300,000 crossings annually; in return, the same number of Swiss trucks would be allowed to move through EU countries. Switzerland also made plain its preference for such trucks to be transported across the country by rail.

      In a September referendum 63.7% of the Swiss voters rejected a proposed 18% limit on the number of resident foreigners. This was the fifth time since 1970 that the issue had been put to a vote. With Switzerland already having four national languages (German, French, Italian, Romansh), the decision by Zürich's education department to teach English rather than French as a first foreign language beginning in 2003 encountered considerable criticism.

Alan McGregor

▪ 2000

41,285 sq km (15,940 sq mi)
(1999 est.): 7,118,000
Bern (administrative) and Lausanne (judicial)
Head of state and government:
President Ruth Dreifuss (for 1999)

      After holding a steady course toward joining both the European Union and the United Nations, the federal government in Switzerland was jolted by the outcome of the Oct. 24, 1999, general elections, in which the right-of-centre Swiss People's Party (SPP) obtained 22.5% of votes cast (45% turnout). This put a question mark over the procedure for implementing the seven agreements signed in December 1998 with the EU and ratified by a large parliamentary majority in October 1999. It also cast doubt on the future of the “magic formula,” whereby the seven seats in the Federal Council (Cabinet) were allocated among the four-party coalition that for 40 years had proved itself as the cornerstone of Swiss political stability. On December 15, however, all seven council members were reelected by parliament.

      This surprising result was due to a campaign by the SPP's right-wing faction headed by Christopher Blocher, a millionaire industrialist and politician. He advocated reinforcing Swiss neutrality; staying out of the EU, the United Nations, and NATO; drastically curbing illegal immigration; reducing taxation; and cutting social spending. His policies appealed particularly to the traditionally conservative middle-class stratum of the population, resentful of the constantly rising cost of (compulsory) health insurance and frequent announcements concerning layoffs attributed to “restructuring.” Even so, the average unemployment rate was still under 3%. Employers were confronted with demands for wage increases and strike threats.

      The continuing influx of refugees caused public unease, even though the number of incoming asylum seekers (some 4,500 for 1999) declined toward the end of the year following the cessation of hostilities in former Yugoslavia. It was announced that from September 1 new arrivals would not be authorized to work until they had resided for one year in the country. Instances of persons denied asylum and resisting expulsion led Swissair, the national airline, to refuse service to such passengers.

      After two years' work, a commission headed by Swiss historian Jean-François Bergier published a much-debated 800-page report on Switzerland's role in World War II. Former chairman of the board of governors of the U.S. Federal Reserve System Paul Volcker headed another commission and concluded his audit of the assets, mainly Jewish, held by Swiss banks since before World War II.

      The Federal Assembly decided in April to extend the government's authority for using the army to protect embassies and international organizations. For months, armed soldiers were stationed around the Palais des Nations in Geneva, the European headquarters of the United Nations, with barbed wire along the perimeter and closing off the main entrance. This was a consequence of the Palais's having been occupied for several hours in 1998 by Kurdish demonstrators, with other groups subsequently seeking to emulate them.

      With the threat of a reduction in strength from 360,000 to 200,000 in the near future and its budget slashed accordingly, the army had a difficult year, with flagrant bookkeeping irregularities and inadequate control of expenditure (some Sw F 8.6 million [Sw F 1 = U.S.$0.67] was unaccounted for), which brought an administrative inquiry into the functioning of the military intelligence service.

      National confidence in the country's organizing ability was shaken by the postponement for 12 months of the national exhibition originally scheduled for 2001. Almost every one of the original organizers and their replacements resigned. Taxpayers might ultimately have to provide some Sw F 300 million more than originally anticipated. Questions regarding “extreme-risk” sports were raised after 19 people were drowned on July 27 in a flash flood while “canyoning” in the Bernese Oberland.

      The finale to what was referred to as the “robbery of the century” was the sentencing on November 3 by a Zürich court of eight men who three years earlier at a Zürich postal sorting office had got away with about Sw F 58.5 million, the largest sum ever stolen in Switzerland in this fashion. Sentences ranged from about one and a half to five and a half years' imprisonment. The prosecution had asked for more, but the judges decided that because the weapons had not been loaded and no physical violence had been used, the sentences were appropriate.

      On December 26–27 Switzerland was battered by near hurricane-force winds; 14 persons were killed, entire forests were uprooted, and property damages was enormous.

Alan McGregor

▪ 1999

      Area: 41,285 sq km (15,940 sq mi)

      Population (1998 est.): 7,118,000

      Capitals: Bern (administrative) and Lausanne (judicial)

      Head of state and government: President Flavio Cotti (for 1998)

      After four years of difficult bilateral negotiations, Switzerland and the European Union signed an agreement on Dec. 10, 1998, for the country's entry into the European Economic Area, commonly regarded as a halfway house to full EU membership. Intended to come into force in 2001, following parliamentary approval, the accord covered such subjects as transportation, reciprocal rights on employment and residence, research cooperation, public procurement (government contract tenders), and mutual acceptance of trade documentation.The ink was hardly dry on the agreement when the extreme-right Swiss Democrats announced that they would collect signatures for a national referendum that they hoped would reject it.

      Although a referendum on full EU membership would eventually be held, this was not expected to be soon. Likely to be dealt with much earlier was the issue of joining the United Nations. Although Switzerland had long been a member of the UN specialized agencies, such as the World Health Organization, a vote in 1986 on joining the UN family resulted in an astonishing 75% "no"; considerations of traditional neutrality, as in the EU vote, were a major factor in the decision. An opinion poll in May 1998, however, showed 57.2% favouring UN membership and 69% supporting proposals for a Swiss solidarity corps able to help throughout the world in any catastrophe, man-made or natural.

      Once again, refugees were a problem, prosperous Switzerland attracting them like a magnet. Though thousands were being refused entry each month, the nation's frontiers were not difficult to slip across illegally for those—particularly "economic refugees"—able to afford the services of a "passeur." Once into the country they could "lose" their identity papers and seek political asylum. Unless one's application was altogether unconvincing, that person was then assured of a bed and food while his or her case was considered. The Kosovo conflict led to a fresh influx of an estimated 40,000, including many families with young children. With air-raid shelters already full, the authorities were obliged to open up barracks and detail 5,600 soldiers on compulsory military service to help.

      The threat of a boycott of Swiss banks by U.S. investors, as called for by the World Jewish Congress, led to an agreement by the banks to pay $1,250,000,000 as compensation for assets, mainly Jewish, held by them since before World War II. Several banks and insurance companies in other countries followed suit.

      The Swiss banks' image was further tarnished by the disclosure that the United Bank of Switzerland (UBS), formed recently by the merger of two of the three leading banks and thereby having become what was described as "the world's second largest bank," had lost some $704 million. This had gone into a U.S. high-risk investment fund apparently in hope of up to 40% profit. The resignation of the UBS president and three top executives did little to reduce public criticism of an establishment seemingly both gullible and irresponsible.

      Inflation for the year was officially estimated at 0.1% (0.5% in 1997). By September unemployment was down to 3.2%, the lowest level in six years. Young people, however, continued to experience difficulties in finding jobs, as did women. In April the national debt exceeded Sw F 100 billion (U.S. $69 billion) for the first time.


▪ 1998

      Area: 41,285 sq km (15,940 sq mi)

      Population (1997 est.): 7,116,000

      Capitals: Bern (administrative) and Lausanne (judicial)

      Head of state and government: President Arnold Koller

      Many Swiss were considerably startled in 1997 at finding themselves being buffeted by an onslaught of criticism, some of it from within Switzerland itself, concerning their country's actions during and after World War II. (See Sidebar (Swiss Banks in Disarray ).) At the same time, they were confronted throughout the year by announcements of widespread layoffs, attributed largely to the restructuring and takeovers of companies. These, in conjunction with the slow emergence from economic depression and near-zero growth, contributed to rising long-term unemployment. Average overall unemployment, however, decreased to about 5% by late in the year, and despite a depressing number of commercial bankruptcies, economic forecasts became cautiously optimistic. While salaries declined marginally in real terms, as they had since 1990, the cost of health insurance continued to rise inexorably, and many families had to struggle to balance their monthly budgets.

      If such were among common everyday concerns for most Swiss, they were overshadowed in the media by periodic blow-by-blow accounts of the federal government's efforts to achieve an agreement with the European Union (EU) on a provisional association of Switzerland with the European Economic Area (EEA)—seen as a move toward full membership in the EU. The staunchly pro-EU government had been rebuffed in a 1992 referendum by rejection of its advocacy, solidly supported by industry and banks, of entry into the EEA. After more than two years of negotiations, its hopes were again dashed in early November when the EU found unacceptable what Switzerland described as its "final" proposals on taxes for 40-ton trucks and on employment and residence in Switzerland of EU nationals. Within a week or so of this setback, however, both sides were reaffirming their confidence that the impasse would be overcome and that, given time, an accord was within reach.

      Faced by a national debt approaching $5,750,000,000, the government applied a range of economies—including graduated salary cuts, of 1% to 3% according to grade, for public officials. This example strengthened the resolve of indebted cantonal governments, Geneva and Vaud in particular, to do likewise.

      In the cities there was a trend to the political left. To reduce unemployment, unions were supporting a 36-hour week (instead of 40) without wage reductions. Apart from occasional sit-ins and demonstrations, reaction to the layoffs took the form of sometimes heated public discussions regarding the "social and moral responsibility" of large companies that had abruptly laid off workers who then became a financial burden to the government. In the same context, multinational firms were criticized for moving manufacturing plants and other facilities to wherever labour was cheaper. The government, meanwhile, proceeded with plans for clearing the national debt and ensuring a balanced federal budget within five years. Various means, including higher taxes, were being considered for increasing government revenue.

      The public was startled again, if momentarily, on September 1 by a mid-morning holdup at a Zürich post office in which five men, armed but not masked, got away with Sw F 55 million. They left several million more behind, there being no more room in their small stolen van disguised as a postal vehicle and fitted with newly stolen official plates. The money, stored in steel boxes, was awaiting transport by an armoured security vehicle to the nearby Swiss National Bank. It was said to have been by far the largest sum thus stolen in the country's history. A Sw F 1 million reward was offered. By mid-October, 17 persons had been arrested in Spain, Italy, and Germany, and some Sw F 25 million had been recovered.


▪ 1997

      A landlocked federal state in west central Europe, Switzerland consists of a confederation of 26 cantons (6 of which are demicantons). Area: 41,285 sq km (15,940 sq mi). Pop. (1996 est.): 7,087,000. Administrative cap., Bern; judicial cap., Lausanne. Monetary unit: Swiss franc, with (Oct. 11, 1996) a free rate of Sw F 1.26 to U.S. $1 (Sw F 1.98 = £1 sterling). President in 1996, Jean-Pascal Delamuraz.

      With apprehension regarding the economic outlook increasing throughout 1996, those Swiss still intent on upholding traditional neutrality by remaining outside the European Union (EU) were reminded that a country's affluence might not in itself protect it against the economic repercussions of developments elsewhere. Reports of financial scandals and a flood of allegations that Swiss banks were still holding sizable deposits from Jews who later died in Nazi extermination camps added to the prevailing unease, as did mismanagement of the pension fund for the 120,000 federal government employees, previously regarded as a rock-solid financial bastion.

      While many of those who had voted in a 1992 national referendum against the government's proposal to join the European Economic Area as a step toward EU membership were clearly having second thoughts, a further setback to the government's aspirations in that direction was the decisive rejection (67% against) of its new labour law in a December referendum. This legislation was intended to ensure increased "flexibility," whereby full equivalent time off for employees in compensation for working nights and Sundays (six a year) would no longer be mandatory; critics pointed out that the law did not necessarily apply to employers. Meanwhile, bilateral negotiations with the European Commission in Brussels inched toward a compromise on reciprocal employment opportunities for EU and Swiss nationals, Switzerland being given seven years in which to comply with the mandatory full freedom of movement. In autumn the government succeeded in edging away from neutral isolationism by securing parliamentary approval (98 votes to 16) for association with NATO's Partnership for Peace.

      The year ended with the number of unemployed totaling 192,171 (a rate of 5.3%), with indications that the rise would continue through much of 1997. Thousands of foreign workers had gone back to their own countries. As was true everywhere in Western Europe, restructuring, computerization, and company mergers continued apace; news of layoffs seemed to come almost daily, and banks sometimes announced those and higher profits in practically the same breath.

      As well as those of some private-sector companies, employees of Switzerland's federal, cantonal, and state enterprises, including the railways, were advised of wage reductions ranging up to 5%. The immediate reaction was large demonstrations coupled with strike threats. Air and ground personnel of Swissair, the national carrier, accepted both staff and salary reductions to bring the enterprise out of the red. Angry farmers protested outside the parliament building in Bern at what they considered inadequate government aid to offset the steep slump in beef prices after both Germany and Italy banned the importation of Swiss beef because of "mad cow" disease. Riot police used tear gas, rubber bullets, and a water cannon with a mixture of water and chemicals on the protesters, and several of them were hospitalized with severe second- and third-degree chemical burns. Eyebrows were raised at plans for an 800-strong military police volunteer battalion that could assist civil police in maintaining public order. (ALAN McGREGOR)

▪ 1996

      A landlocked federal state in west central Europe, Switzerland consists of a confederation of 26 cantons (6 of which are demicantons). Area: 41,285 sq km (15,940 sq mi). Pop. (1995 est.): 7,039,000. Administrative cap., Bern; judicial cap., Lausanne. Monetary unit: Swiss franc, with (Oct. 6, 1995) a free rate of Sw F 1.15 to U.S. $1 (Sw F 1.82 = £1 sterling). President in 1995, Kaspar Villiger.

      Although voter turnout was only 42%, the outcome of the general elections—held once every four years—on Oct. 22, 1995, showed a wind of change, or at very least a breeze, in Switzerland. Chief beneficiaries were the Social Democrats, who gained a dozen additional parliamentary seats, putting them on top with 54. On the right the Swiss People's Party took four more seats, giving it 29. If poles apart on major issues, such as social services and unemployment, financial policies, and possible membership in the European Union (EU), the two parties in the coalition government had stated their aims more clearly, and with more verve, than the two other coalition parties, the Radicals (45 seats, up one) and the Christian Democrats (34, down 2). Most of the eight minority parties found themselves deprived of one or more seats, the hardest hit being the Green Party, which lost five seats, leaving it with nine. A group of 31 parliamentarians—Socialists, Radicals, Christian Democrats, and Greens—which had been meeting discreetly for two and a half years, called for political renewal within the new parliament in helping the coalition government formulate policies, including association with the EU.

      Late in the year a Max Schmidheiny Foundation "White Paper" said bluntly that revitalizing the Swiss economy necessitated more work for less money in facing up to Asian competition in export markets. The analysis opposed the concept of increased productivity ensuring shorter working hours and more leisure, as well as the idea of job sharing to reduce unemployment. In calling for privatization of postal, telecommunications, and railway services, it also supported the principle of free movement of persons across frontiers within the EU.

      The unemployment rate, well under half the European average, decreased over the year to about 4%. It was still a nagging worry, however, especially in French-speaking Swiss Romande, where it was around 5.5%, more than double the level in German-speaking Switzerland. With many enterprises restructuring in their drive for improved competitiveness, sizable layoffs were commonplace. Forecasts for 1996 held little prospect of a brisk economic upturn. According to an official study, the total of 150,000 unemployed—compared with 180,000 at the trough of the recent depression and a mere 17,500 in 1989—could be reduced to a hard-core 60,000 by the year 2000 if the gross national product growth rate could be kept at no less than 2.25%. This was regarded as a realistic projection, provided exports were not further disadvantaged by the soaring Swiss franc in its function as a safe-haven currency. With the high franc hitting tourism, hoteliers reported their worst year in decades; some even began to quote firm prices in French francs or dollars for advance bookings.

      Switzerland's collective labour contracts, which incorporate no-strike clauses and periodic renegotiation of wage levels, came under strain as well. Scope for concessions was extremely narrow, the parties were increasingly intractable, and some employees accepted reduced pay to keep their jobs. The construction industry, emerging from the doldrums, heard its main trade union observe, "We have the funds to afford it," and assert that 1996 could see "a real strike"—as compared with the occasional tentative examples of recent years.

      After calling repeatedly for brakes on excessive government spending induced by the "euphoric years" of boom, Finance Minister Otto Stich, in office for more then a decade, resigned. He handed over his portfolio on November 1 to Kaspar Villiger. As defense minister since 1989, Villiger had adroitly presided over introducing the "Army 95" plan, which trimmed the ranks of the militia-type citizen army from 600,000 to 400,000 men and restricted liability for service to ages 20-42. The family and friends of Paul Grüninger, police chief at St. Gallen who was dismissed from his post in 1940, finally succeeded in having the original verdict quashed. Grüninger, who died in 1972 at age 81, had been pronounced guilty of disobeying a government order in 1938 not to allow more Jewish refugees to enter Switzerland. His disobedience saved the lives of some 3,000 people who would otherwise have been sent to Nazi extermination camps. (ALAN McGREGOR)

▪ 1995

      A landlocked federal state in west central Europe, Switzerland consists of a confederation of 26 cantons (6 of which are demicantons). Area: 41,284 sq km (15,940 sq mi). Pop. (1994 est.): 6,991,000. Administrative cap., Bern; judicial cap., Lausanne. Monetary unit: Swiss franc, with (Oct. 7, 1994) a free rate of Sw F 1.28 to U.S. $1 (Sw F 2.03 = £1 sterling). President in 1994, Otto Stich.

      With political maneuvering for the next general elections—scheduled for Oct. 22, 1995—already apparent by late 1994, the year was a troubling one for those Swiss feeling themselves faced with fateful decisions. Judging by frequent opinion polls, views on the burning question of the country's relationship with the European Union (EU) remained about as evenly divided between for and against membership as in the Dec. 6, 1992, referendum. On that occasion the government's plans for entry into the European Economic Area—a stepping-stone to full Union membership—were blocked by the slimmest of margins, a mere 0.3% of the votes.

      While bilateral discussions, started early in 1994, with the European Commission in Brussels on such issues as road transport regulations were unsatisfactory, the year closed with more hopeful prospects in a new round of negotiations whereby Switzerland could avoid increased political and economic isolation. As in previous negotiations, an evident stumbling block was the EU proviso on free movement of people to work anywhere in member nations, a concept on which the Swiss were markedly unenthusiastic.

      Economic recession and industrial streamlining had increased the number of unemployed workers to about 165,000, despite the return to their own countries of many thousands of foreign workers whose jobs also were lost. Swiss companies that moved some of their facilities to regions that had lower labour costs included the national airline, Swissair. It announced major savings by shifting its accounting department to Bombay, where it employed 250 Indians who were paid at less than a tenth of the Swiss rate.

      It seemed for a time that the country might be retreating farther inside its neutralist shell when a June 12 national referendum rejected proposals for a 600-strong volunteer force to help in United Nations peacekeeping operations and for making it easier for resident foreigners to acquire Swiss nationality.

      The government breathed a sigh of relief, however, when a September 25 referendum produced a 54.7% majority for its antiracism law penalizing racial and religious discrimination. Nonetheless, in a referendum on December 4 an almost 73% majority approved increased powers for the police to deal with foreigners who entered the country illegally and then broke the law. Critics said the measure violated both the Swiss constitution and the European Convention on Human Rights. (See International Migration (Populations and Population Movements ).)

      The prevailing uncertainty, especially regarding the EU, was reflected in reported differences of opinion within the seven-member Federal Council (Cabinet), functioning on the collegiate system and by consensus. This, in turn, raised a question concerning the validity in changing circumstances of the "magic formula," devised by the legislature in 1959, in which the Radical Democrats, Christian Democrats, and Social Democrats had two seats each and the Swiss People's Party one.

      Despite savings, Switzerland's 1995 budget showed a deficit of some Sw F 6 billion, making further cuts imperative, including a freeze on the pay of government officials. With the private sector similarly disposed, talk of strike action was in the air.

      Attention continued to be focused on the country's serious drug problem, especially on the Letten, a disused railway station near the centre of Zürich that had become a centre for addicts. Several dealers died in shootouts there. The public was also aghast at the murders and suicides in Switzerland and Quebec during October 4-5 of 53 persons, women and children among them, who belonged to the Order of the Solar Temple, a quasi-religious sect.


▪ 1994

      A landlocked federal state in west central Europe, Switzerland consists of a confederation of 26 cantons (6 of which are demicantons). Area: 41,284 sq km (15,940 sq mi). Pop. (1993 est.): 6,996,000. Administrative cap., Bern; judicial cap., Lausanne. Monetary unit: Swiss franc, with (Oct. 4, 1993) a free rate of Sw F 1.42 to U.S. $1 (Sw F 2.15 = £1 sterling). President in 1993, Adolf Ogi.

      Uncertainty about the future was widespread in Switzerland during 1993, with unemployment continuing to rise and drug addicts often being blamed for street crime. Even so, by comparison with their neighbours, the Swiss, certainly those outside the cities, had reason to feel their country could still be categorized as peaceful and, despite the prevailing recession, basically prosperous. As such, it remained a magnet for refugees, with many of them entering illegally before applying for political asylum.

      The shock waves caused by the hairbreadth rejection—50.3% of votes in a nationwide referendum on Dec. 6, 1992—of the government's draft agreement on entering the European Economic Area (EEA), which would group the 12 members of the European Community (EC) and the 7 countries of the European Free Trade Association (EFTA), including Switzerland, soon subsided. There followed efforts by industrial chiefs, business leaders, and government ministers to persuade anti-EEA voters that the country's best prospects would ultimately be realized by full EC membership. A second vote was expected but not before 1996 at the earliest.

      In the meantime, the government went ahead with measures to curtail the damage, which included a year's delay in bringing the EEA into operation. At EC headquarters in Brussels, Swiss representatives sought to convince officials that the unexpected result was no more than a passing aberration and in no way a change of heart. Their endeavours resulted in the EC foreign ministers' agreeing on Nov. 8, 1993, to pursue bilateral negotiations with Switzerland on transport (particularly the long-standing Swiss refusal to allow 40-ton trucks to transit their territory), joint research projects, removal of the restriction on EC agricultural products, and points arising from the EEA's entry into force early in 1994. Pro-Europeans could interpret this as showing the country was discreetly coming back on track. They were encouraged, too, by the approval in a November referendum of the government's proposal to introduce a value-added tax (VAT), initially at 6.5%, which would replace the 6.2% sales tax and yield an estimated additional $550 million for the federal treasury.

      While the VAT was a step toward bringing Switzerland into line with EC practice, it was primarily one of a series of measures to increase revenue and cut spending because of a record $4.7 billion deficit in the 1994 budget. State employees, including those of the post office and railways, were informed that salaries could no longer be wholly index-linked (inflation was down to 3.4%), thus setting a precedent for the private sector.

      By far the main preoccupation, however, was unemployment, which rose, as recession persisted, toward the 200,000 mark in a labour force of 3.5 million. The Geneva region, with 7% out of work, was particularly badly hit. Even if the figure was well below the European average, the impact was profound in a country where full employment had come to be regarded as virtually assured. With their members' real earnings falling for the second year in succession, trade unions were in no mood for compromise in their annual negotiations on setting wage levels under the collective labour contracts. These, incorporating index-linked increases, dated from the 1937 no-strike agreement that hitherto had ensured industrial peace.

      Talk of strikes was in the air as winter set in, with demonstrators, though in no great numbers, taking to the streets bearing banners with demands such as "A halt to deterioration in conditions of work and life." Local government elections in Geneva in November produced a clear swing to the right, with the Socialists deprived of representation in the seven-member city council for the first time since 1945.

      In November, Defense Minister Kaspar Villiger publicly expressed interest in U.S. Defense Secretary Les Aspin's suggestion that neutral countries, as well as former Warsaw Pact states, might consider an association with NATO amounting to something less than full membership.


* * *

Switzerland, flag of   federated country of central Europe. Switzerland's administrative capital is Bern, while Lausanne serves as its judicial centre. Switzerland's small size—its total area is about half that of Scotland—and its modest population give little indication of its international significance.

      A landlocked country of towering mountains, deep Alpine lakes, grassy valleys dotted with neat farms and small villages, and thriving cities that blend the old and the new, Switzerland is the nexus of the diverse physical and cultural geography of western Europe, renowned for both its natural beauty and its way of life. Aspects of both have become bywords for the country, whose very name conjures images of the glacier-carved Alps beloved of writers, artists, photographers, and outdoor sports enthusiasts from around the world.

      For many outsiders, Switzerland also evokes a prosperous if rather staid and unexciting society, an image that is now dated. Switzerland remains wealthy and orderly, but its mountain-walled valleys are far more likely to echo the music of a local rock band than a yodel or an alphorn. Most Swiss live in towns and cities, not in the idyllic rural landscapes that captivated the world through Johanna Spyri (Spyri, Johanna)'s Heidi (1880–81), the country's best-known literary work. Switzerland's cities have emerged as international centres of industry and commerce connected to the larger world, a very different tenor from Switzerland's isolated, more inward-looking past. As a consequence of its remarkably long-lived stability and carefully guarded neutrality, Switzerland— Geneva, in particular—has been selected as headquarters for a wide array of governmental and nongovernmental organizations, including many associated with the United Nations (UN)—an organization the Swiss resisted joining until the early 21st century.

      Switzerland's rugged topography and multicultural milieu have tended to emphasize difference. People living in close proximity may speak markedly distinct, sometimes nearly mutually unintelligible dialects of their first language, if not a different language altogether. German, French, Italian, and Romansh all enjoy national status, and English is spoken widely. Invisible lines separate historically Protestant from historically Roman Catholic districts, while the tall mountains of the Saint Gotthard Pass separate northern from southern Europe and their diverse sensibilities and habits. Yet, Switzerland has forged strength from all these differences, creating a peaceful society in which individual rights are carefully balanced against community and national interests.

      Switzerland was formed in 1291 by an alliance of cantons (canton) against the Habsburg dynasty—the Confoederatio Helvetica (or Swiss Confederation), from which the abbreviation CH for Switzerland derives—though only in 1848, when a new constitution was adopted, was the present nation formed. Prior to 1848, internal conflict was quite common, but Switzerland has enjoyed relative domestic tranquility since the mid-19th century, and its organization has remained essentially the same: it is a union of more than 3,000 communes, or municipalities, situated in 26 cantons, 6 of which are traditionally referred to as demicantons (half cantons) but function as full cantons. Ordinary citizens are able to participate at every level of politics and regularly exercise their will in referenda and initiatives, through which Swiss citizens directly make numerous policy decisions at the national and subnational level. Two effects of this popular involvement are evident: Swiss taxes are rather low by European standards, because voters are able to review and approve a broad range of expenditures, and political decision making tends to be slow, because contending individual claims and opinions must be allowed to be expressed at every step.

      That high level of citizen involvement prompted the renowned 20th-century Swiss playwright and ironist Friedrich Dürrenmatt (Dürrenmatt, Friedrich) to allegorize Switzerland as a prison in which each Swiss citizen was at the same time prisoner and guard. Even so, the Swiss blend of federalism and direct democracy is unique in the world and is considered central to the country's political and economic success. And Switzerland is indeed a major economic power, thanks to its long tradition of financial services and high-quality, specialized manufactures of items such as precision timepieces, optics, chemicals, and pharmaceuticals, as well as of specialty foodstuffs such as Emmentaler cheese and milk chocolate. Switzerland is regularly judged to have among the world's highest standards of living.

   Bern is a placid city whose name derives from the bear pits the canton's medieval rulers established there as a heraldic symbol; the bear pits are now part of the city's popular zoo. A metropolis extending along a large lake where the mountains meet the plains, Zürich is by far the country's largest and most cosmopolitan city, its famed Bahnhofstrasse rivaling shopping districts found in other leading cities in the world. Basel and Lucerne are major German-speaking cities, Geneva and Lausanne the centres of the country's French-speaking cantons, and Bellinzona and Lugano the principal cities in the Italian-speaking Ticino.

      Switzerland has long been a model multiethnic, multilingual society, a place in which diverse peoples can live in social harmony and unite in common interest. The Swiss justifiably take great pride in this, and the point was encapsulated in the early 21st century by Ruth Dreifuss, who in 1999 became the country's first woman and first Jewish president (a post that rotates annually):

I may be a native speaker of French, but my parents originally came from German-speaking Switzerland and I myself worked in an Italian-speaking area for a while and enjoy travelling to all parts of the country…. I live in a neighbourhood in which over 100 different nationalities live together in peace and harmony…. I greatly appreciate this diversity.

      Switzerland is bordered to the west by France, to the north by Germany, to the east by Austria and Liechtenstein, and to the south by Italy. It extends about 135 miles (220 km) from north to south and 220 miles (350 km) at its widest extent from west to east. Switzerland's landscape is among the world's most unusual, and it has long had to contend with a variety of environmental problems that threaten its integrity. Economic development and high population density have caused severe environmental stress, resulting in pollution and debates over the use of natural resources. During the 1970s and '80s, ambitious environmental policies were implemented by the cantons and municipalities, and this led to impressive progress on pollution abatement. For example, air-pollution emissions in Switzerland are among the lowest in industrialized countries.

Relief and drainage
 Situated at the hydrographic centre of Europe, Switzerland is the source of many major rivers. The two most important are the Rhône (Rhône River), which flows into the Mediterranean Sea, and the Rhine (Rhine River), which empties into the North Sea. Switzerland's small area contains an unusual diversity of topographic elements, which are divisible into three distinct regions: the Jura Mountains in the northwest, the Alps to the south and east, and the Mittelland, or central plateau, between the two mountain ranges.

      The Jura (Celtic: “Forest”), a rolling mountain range in the northwest, occupies about one-eighth of the country. The region was formed under the extended impact of the general Alpine folding, which created the folded Jura that abuts the Mittelland and the tabular plateau Jura that forms the northern edge of the range. Jurassic (Jurassic Period) limestone and marl with rich fossil content are the characteristic rocks that dip below the Mittelland and appear again in the pre-Alps. The limestone has been eroded in typical karst fashion, with sinkholes, caves, and underground drainage common. The ridges, covered with meadows and only sparsely forested, receive more precipitation than do the valleys, the slopes of which are wooded. Between Saint-Imier Valley (Vallon St. Imier) and the Doubs, a river that forms part of the border with France, the Jura has been reduced by denudation to form an undulating plateau that extends into France. Known as the Franches Montagnes (French: “Free Mountains”), a name acquired in 1384 when the bishop of Basel freed the inhabitants from taxation to encourage settlement of the remote area, this tableland is characterized by mixed agriculture and dairying. The highest point in the Jura, Monte Tendre, at about 5,500 feet (1,700 metres), is well below the Alps; indeed, the Jura was not a significant barrier to surface movement even before modern railroads and highways were constructed. Entrenched transverse valleys known as cluses have been eroded across the Jura ridges, providing relatively easy routes for transportation. The climate of the Jura, which has abundant precipitation, is the most continental of Switzerland; cross-country skiing is popular during the long winters. Switzerland's watchmaking industry had its beginning in these mountains.

  The Alps were built of large complexes of massed overthrusts of extremely varied sedimentary, metamorphic, and igneous rocks that were shaped by glaciation. The canton of Valais contains many striking Alpine peaks, including the Dufourspitze on the Monte Rosa massif, at 15,203 feet (4,634 metres) the highest point in Switzerland; the Weisshorn (14,780 feet [4,405 metres]), overlooking the valley called the Mattertal; the Dom (14,912 feet [4,545 metres]), above the village of Saas Fee; and the ice-sculpted Matterhorn (14,691 feet [4,478 metres]), long a symbol of Switzerland. The northern and southern Swiss Alps are separated by the trough formed by the Rhône and upper Rhine valleys, the narrowest portion being the Urseren valley, which lies between two crystalline central massifs, the Gotthard and the Aare.

      The Alps' role as the European watershed is most apparent in the central Alpine region of Switzerland, where the different chains meet; from there the Rhône River flows west, the Rhine River east, the Ticino River south to the Po River, and the Reuss River north to the Aare. The fundamental Alpine source point, however, is located in the upper Engadin valley at the Piz Lunghin, from which streams flow toward the North and Adriatic (Adriatic Sea) seas and from which the headwaters of the Inn River flow toward the Danube (Danube River) and ultimately into the Black Sea.

 The country's geographically destined role as guardian of Europe's natural trans-Alpine routes has been both a reason for and a basic tenet of its existence—a role expressed in its traditional neutrality in times of war. In the central Alpine region lies the Saint Gotthard route, the first and shortest north-south passage through the mountains and an important European linkage; it was opened in the early 13th century with the construction of a bridge in the Schöllenen Gorge, which traverses the northern chain, while the southern range is crossed by the Saint Gotthard Pass at an elevation of 6,916 feet (2,108 metres). The 9-mile (14-km) Saint Gotthard rail tunnel through the pass was opened in 1882; a twin 10.5-mile (17-km) road tunnel was opened in 1980. Despite the tunnels, increasing rail and highway traffic often results in long delays through the mountains. For example, on weekends during the peak summer tourist season, cars and trucks are often backed up some 10 to 15 miles (16 to 25 km).

 Between the Jura and main Alpine ranges lies the hilly Mittelland, accounting for nearly one-fourth of the country and enclosed by the two mountain ranges and the two largest lakes, Lake Geneva (Geneva, Lake) (Lac Léman) in the west and Lake Constance (Constance, Lake) (Bodensee) in the east. The fertile rolling land of the Mittelland is the agricultural heartland of the country and is where the majority of Swiss settlements, population, and industry are situated. Furthermore, vital east-west highway and rail routes bind the urban areas. As a result, the Mittelland is highly urbanized, with large chunks of land sterilized by shopping centres, housing estates, motorways, oil-storage tanks, container depots, warehouses, automobile distribution centres, and industrial complexes.

      Soil conditions and agriculture reflect the diversity of Switzerland's climate and geologic structure. The major soil groups consist of gray-brown podzolic soils and brown forest soils, loess, glacial drift, and alluvium in the Mittelland; brown forest soils, rendzinas, and the heavier glacial clays in the Jura valleys; and the lithosol and podzolized soils of the high Alps.

      Four major European climates affect Switzerland. From the west, influenced by the North Atlantic Drift, come mild and moist air masses; dry and cold air arrives from the North Arctic areas; continental air from the east brings dry colder air in winter and warmer air in summer; and relatively moist and warm air flows northward from the Mediterranean. The mixing of these air masses over Switzerland produces weather patterns that not only change according to which air masses are involved but also are characterized by great variation in temperature and precipitation because of local relief.

Wind systems
      Prevailing winds are mainly from the west, but in valleys air currents are channeled into particularly frequent or violent local winds such as the Bise, a cold northeast wind that sweeps across the Mittelland and funnels down Lake Geneva to the city of Geneva. foehn (German: Föhn) winds, which are associated with the leading edge of a low-pressure system moving across Europe north of Switzerland, often blow for one or two days; though they may occur anytime during the year, they are most frequent in spring. Sudden temperature increases occur because the foehn, which crosses the Alps from south to north (it can also blow from north to south, affecting Ticino), cools at a slower rate rising over the mountains because of precipitation; it is then heated and dried as it descends down the northern valleys, thereby moderating the climate on the northern slopes of the Alps.

      Since rainfall tends to increase in direct proportion to altitude, precipitation varies according to relief. Thus, because of the marked variation in relief that characterizes Switzerland, differences in precipitation within short linear distances are often very great. For example, Sankt Gallen (St. Gall), at 2,556 feet (779 metres), has an average annual precipitation of about 50 inches (1,300 mm), while precipitation at Säntis, at an elevation of 8,202 feet (2,500 metres) but only some 12 miles (20 km) away, is more than 110 inches (2,800 mm). The average annual precipitation of three-fourths of the country exceeds 40 inches (1,000 mm), varying amounts of which fall as snow. In Lugano (at 896 feet [273 metres]), which is located in the canton of Ticino in the southeast and has a modified Mediterranean climate, little precipitation is in the form of snow; in Zürich (at 1,824 feet [556 metres]) about one-tenth is snow; and on the Säntis nearly three-fourths is snow. At elevations above 11,500 feet (3,500 metres), all precipitation is in the form of snow, which compacts into perpetual snowfields and glaciers; the snow line is at about 9,200 feet (2,800 metres) in the northern Alps and about 10,800 feet (3,300 metres) in the southern Alps of the Valais.

Dry areas
      There are distinct dry pockets in the mountains of Switzerland's interior. The best-known dry area is the Rhône valley in the Valais, which is closely encircled by the highest (13,000 feet [4,000 metres]) mountain groups. Although precipitation is slight on the slopes near the cantonal capital of Sion (at 1,581 feet [482 metres]), extensive irrigation is possible, since the valley is surrounded by large snowfields and by glaciers that extend down the upper valleys. The rarefied and dry though somewhat polluted air of such high-altitude towns as Davos (5,216 feet [1,590 metres]) and Arosa (5,987 feet [1,825 metres]) permits a more intense, broader-spectrum solar irradiation and thus produces a climate famous in the past for tuberculosis cures. Today the climate attracts skiers as well as tourists seeking an escape from the polluted air of lowland Europe. At elevations of 13,000 feet (4,000 metres), precipitation levels rise to some 160 inches (4,000 mm), and the Mönch (13,448 feet [4,099 metres]) in the Jungfrau group of mountains has the highest average annual precipitation in Switzerland, 163 inches (4,140 mm), while Stalden in the entrenched Vispa valley, 4 miles (6 km) south of the main Rhône valley, has the lowest, 21 inches (533 mm).

Skies and temperatures
      The stable high-pressure weather conditions prevailing over central Europe and the Alps during autumn and winter create cold air masses that result in lowland fog, a climatic phenomenon with widely varying consequences. The mouths of the northern Alpine valleys, the basins of the Jura Mountains, and the villages and cities of the low areas of the Mittelland are blanketed for days and often for weeks on end, while towns located at higher altitudes enjoy warm, brilliant, high-pressure conditions and the view of the glistening sea of fog below them. Temperature inversions (temperature inversion) between mountain and valley locations in close proximity can be quite pronounced, with higher elevations having higher temperature readings. Frequent temperature inversion has made Switzerland's high-altitude resorts healthful places even during winter and has helped the Alpine winter season gain popularity in Europe for sports; in addition, because of these inversions polluted air is much less common in areas of high elevation than in the lowlands. In fact, the temperature inversions that affect the Mittelland tend to trap polluted air for weeks when cyclonic activity stagnates.

Avalanches (avalanche)
      With the increase in winter tourism, the study of avalanches (avalanche) has developed as a branch of Alpine climatology, and in wintertime the research station near Davos releases daily avalanche bulletins as a warning for villagers and tourists. The Alpine cantons have about 10,000 avalanches annually, with about four-fifths of them occurring in February, March, and April. For centuries, village communes have relied on forests on the mountain slopes for protection from these slides, because a 20- to 30-year-old forest can inhibit or stop small avalanches. Villages, highways, and Alpine paths are also protected by costly artificial structures such as metal barriers, earthen walls, and concrete wedges and enclosures. acid rain, however, has caused the illness and death of many trees in the mountain areas of Switzerland and poses a serious threat to their ability to act as barriers to avalanches. In the mountain forests, some two-fifths of the trees have been classified as damaged, sick, or dying.

Plant and animal life
      Vegetation in Switzerland is derived from that of the four European climatic regions that converge in the country and has been influenced by the varied relief. It includes the beeches and oaks of the maritime west; hornbeam and larch trees in the more continental east, predominantly in the Engadin and the dry Valais; extensive spruce forests in the northern subalpine region; and chestnut groves in the south. Differences in vegetation are evident in the Alpine valleys because of exposure to the sun. The vegetation boundaries are several hundred feet higher in the south of the country—for example, in Valais—than in the north because of the southern exposure. Alpine vegetation, similar to that of Arctic tundra, prevails above the tree line. It is very susceptible to erosion through skiing impacts and as a result of paths or four-wheel-drive trails cut into the slopes.

Animal life
      Switzerland's animal life is primarily Alpine, but a mixture of species familiar to southern and north-central Europe is also found. Animal life is protected, except during a brief annual hunting season. Alpine tourists may observe marmots, which live in the high meadows, and chamois. Large herds of the round ibex, which had died out in the Swiss Alps and has since been reintroduced, populate several areas, especially in the Bernina region of Graubünden (canton) and in the Saastal of Valais. In the forests there are deer, rabbits, foxes, badgers, squirrels, and many varieties of birds, including eagles, while lake and river trout may be found but are no longer as abundant as in the past. Snakes and lizards are concentrated in the south, but insects, in great variety, are diffused throughout the country.

People (Switzerland)
      To survive as a cohesive unit and to protect the neutrality that has been their safeguard, the disparate elements of the Swiss people have had to learn a mutual cooperation. Their outlook has been shaped largely by economic and political necessity, which has made the Swiss public realistic, cautious, and prudent in accepting innovation and creative in the use of their resources. Switzerland's human resource has been effectively educated and efficiently utilized to transform what was a predominantly mountainous, rural, and landlocked country with limited natural resources into one of the most diversified and important industrial and commercial countries in the world.

Ethnic groups and languages
      Most of the major cultural regions of western continental Europe—German, French, and Italian—come into contact in Switzerland. Thus, one of the country's distinctive features is the variety of its languages. The Swiss constitution recognizes German (German language), French (French language), and Italian (Italian language) as official languages. Since 1996 Romansh (Romansh language) (Rhaeto-Romance), a linguistic relic preserved in the mountainous regions between the Gotthard massif and the eastern Alps, has had official status at the federal level for communicating with Romansh-speaking persons (it had been designated as an official “national” language in 1938). At the beginning of the 21st century, more than three-fifths of the total population spoke German, one-fifth French, about one-twelfth Italian, and less than 1 percent Romansh. Nearly one-tenth of the population spoke a nonofficial language, with people of Croatian, Portuguese, Serbian, and Spanish descent most prevalent in this category. The country's ethnic breakdown largely mirrors its linguistic divisions. Foreign residents make up about one-fifth of the country's total population, and in some cantons the proportion is considerably higher. For example, in Geneva more than one-third of residents are foreigners. The foreign-born population in Switzerland increased substantially in the 1990s, when the country provided refuge to those fleeing the violence in Bosnia and Herzegovina and in Kosovo.

      Switzerland also exhibits considerable religious diversity. However, the distribution of religions does not coincide with that of languages, as the population shifts brought on by industrialization resulted in greater mixture of religions. Roman Catholics slightly outnumber Protestants, and there is a small but significant Muslim population and a tiny Jewish community. The constitution of 1874 guaranteed full religious liberty but repeated the 1848 constitution's prohibition of settlement by Jesuits (Jesuit) (members of the Roman Catholic Society of Jesus) and their affiliated societies. This anti-Jesuit article was repealed in a national referendum in 1973. Although religion has been pivotal in shaping the country, church attendance and religiosity have declined substantially; about two-fifths of Roman Catholics and half of Protestants attend church regularly. About one-eighth of Swiss citizens profess no religious affiliation, a figure that increased in the last decades of the 20th century.

Settlement patterns
      The diversity of geomorphology, climate, and plant distribution in Switzerland provides a wide variety of settlement sites, a variety further enhanced by the country's central European location.

Rural (rural society) communities
 Rural settlements predominate in the valleys, where characteristic Alpine villages extend along the base of slopes. Since the creation of extensive river diversions, undertaken chiefly during the second half of the 19th century, many villages (e.g., in the Seeland between Lakes Neuchâtel (Neuchâtel, Lake) and Biel) have expanded into valley plains, where intensive farming occurs. The isolation of portions of many valleys—such as those of the Rheinwald, Poschiavo, and Urseren—by barriers of resistant rock or by prehistoric landslides was an impetus to the formation of communes and of the early Alpine cooperatives.

      The modern network of small but politically important communes stands out in the parallel relief of the Jura and the Alps, as the boundaries of the communes are generally drawn from one mountain crest to the next. Every commune has all the basic living requirements, including pasture, forest, fertile valley bottom, and water. Terraced slopes characterize the sites of villages that serve as bases for “Alpine nomadism (transhumance),” the seasonal moving of livestock to or from the mountains. In the latter part of the 20th century, the intensity of this practice declined considerably.

      Some villages, such as Guarda in the lower Engadin and Grimentz in the Val d'Anniviers of Valais, are renowned for their picturesque beauty, and others, such as Crans-Montana on the slopes above the Rhône valley in Valais canton and Wengen in the Berner Oberland, have developed into famous resorts. Places such as Bad Ragaz in the Rhine valley and Leukerbad in Valais canton are noted as spas. Valley forks, where the traffic from two valleys combines, were natural sites for settlement. Two of the best examples are Martigny (the Roman city of Octodurum), at the meeting of the Great Saint Bernard Pass route and the Rhône valley, and Chur, a more than 5,000-year-old city located where the Rhine connects with passes to the interior of the canton of Graubünden. In addition, settlements are found within the Alps, such as Amsteg on the Saint Gotthard Pass ( Uri canton), Silvaplana, where the Julier Pass meets the Inn valley (the upper Engadin), and Gordola, at the junction of the Verzasca valley (Val Verzasca) and the Ticino River plain (near Locarno). In the Mittelland, with its abundant lakes, villages sited on deltas are especially closely related to the environment. In recent decades, towns have expanded toward each other and merged, creating population belts all along the lakes. Uncontrolled property speculation permitted many characteristic, substantial village settlements to spread into the surrounding areas with very little architectural or land-use planning. Owing to this sprawl, in 1979 the federal government introduced a law on spatial planning that attempted to control and structure the development of settlements.

Urban (urbanization) settlements
      Some cities in Switzerland originally developed around monasteries (e.g., Sankt Gallen) or around Roman settlements (e.g., Zürich and Lausanne). Within the Alps of Vaud, Vevey and Montreux were sited on small deltas jutting into Lake Geneva (Geneva, Lake) that provided flat land near the mountainous north shore; in the Alps of Ticino, Locarno and Ascona developed on the delta of the Maggia River. Many settlements evolved from their distinct sites. For example, Fribourg (founded in 1157) and Bern (1191) were established at strategic river crossings. Fribourg was sited on a loop of the entrenched Sarine River where a key trade route crossed the river; Bern was located on the easily defended great bend of the Aare. Both developed distinctive central cores with unified urban architecture. Each Swiss city is geographically unique, particularly those lying at the head of a lake, such as Zürich, Geneva, and Lucerne (Luzern), which were essentially harbour towns until the opening of the railroads. Today all three benefit from the summer lake steamers that transport large numbers of tourists. Situated where, respectively, the Limmat, Rhône, and Reuss rivers drain the lakes, against backdrops of nearby sculpted Alpine peaks, Zurich, Geneva, and Lucerne combine local glacial topography with urban structures, including architecturally significant cathedrals, to form a composite landscape of nature and culture. Hill towns such as Regensberg and Gruyères, which were medieval fortified settlements with castles and distinctive late Gothic architecture, have a natural dominance over the local region that was significant at the time of their origin. Today both survive largely because tourists are attracted to their relatively unspoiled appearances.

      In Switzerland, isolated from the rest of Europe by mountainous barriers, location in relation to traffic patterns has played an important role in urban development. The keys to a series of mountain passes are the towns of Chur (to the passes of San Bernardino (San Bernardino Pass), Julier, and Albula), Martigny (Great Saint Bernard), and Bellinzona (Saint Gotthard). Lugano was sited on a small delta south of which the Gotthard route crossed Lake Lugano on a glacial causeway. Basel's location, first at a bridge crossing the Rhine and then at the head of modern Rhine navigation, has been of particular significance, since this was the basis of its early prominence as a city of scholars and bankers and of its present international importance as an industrial and transportation node. A number of cities are also important tourist destinations. Interlaken, on a delta that separates Thun and Brienz lakes, is the best-known example. Others include Geneva, Lucerne, Zürich, and Bern. In the mountains, Saint Moritz (Sankt Moritz), Zermatt, and Davos, all with vast areas of ski slopes and scores of lifts, are the most significant resorts. Switzerland's largest cities are Zürich, Basel, Geneva, Bern, Lausanne, Winterthur, Sankt Gallen, and Lucerne.

Demographic trends
      Since the beginning of the 20th century, the population of Switzerland has more than doubled, from about 3.3 million in 1900 to slightly more than 7 million at the turn of the 20th century. Growth was largest in the post-World War II period, when relatively high birth rates coincided with a period of high economic growth and immigration. Switzerland experienced significant immigration throughout the 20th century. While about one in eight Swiss residents were foreigners in 1900, this figure dropped to about 5 percent during World War II; since the 1950s, it has increased steadily, and, at the turn of the 21st century, about one in five people were foreigners.

      Largely as a result of Switzerland's relatively low birth rate (about half the world average), the country's population grew only slightly during the last decades of the 20th century. Excellent medical coverage and a high standard of living have combined to give the Swiss among the highest average life expectancies in the world. Moreover, as in many industrialized countries, Switzerland's population has grown increasingly older. For example, the proportion of the population under age 20 fell from about two-fifths at the beginning of the 20th century to slightly more than one-fifth at the beginning of the 21st century. In contrast, the percentage of the population over age 65 grew from about 6 percent to more than 15 percent in the same period, and it is anticipated that a growing elderly population will put severe strains on the country's medical care system.

      Switzerland's economic development has been affected by specific physical and cultural geographic factors. In the first instance, the country has few raw materials; precipitation and soil quality largely determine the type and size of cultivation; urban and industrial expansion encroach on the limited amount of cultivable land; the commerce and transport sectors have benefited from Switzerland's central location along international trade routes; and tourism has been boosted by the landscape's exceptional scenic beauty, including glacial peaks and Alpine lakes. In the second instance, the inability of the country's small domestic market to absorb the total output of a skilled and efficient population forced Switzerland to seek world markets. Thus, by importing raw materials and converting them into high-quality, high-value-added finished products for export, developing a highly organized and efficient transportation system and tourist industry, and establishing a free-market orientation, Switzerland generally has been able to keep unemployment low and inflation under control and has achieved among the world's highest standards of living and per capita incomes.

      The various physical and cultural factors also have given rise to the development of service industries such as shipping, banking, insurance, and tourism, as well as to exports such as chemicals, machines, precision instruments, and processed foods. The Swiss economy is characterized by industrial diversity and a lack of large firms. However, a number of Swiss enterprises—such as the food giant Nestlé (Nestlé SA) and the pharmaceutical firm Novartis (Novartis AG)—have worldwide enterprises that employ far more people abroad than in Switzerland and sell most of their products in foreign markets. Foreign labourers constitute about one-fourth of the economically active population in Switzerland, and without their presence many sectors of the economy (e.g., hotels, restaurants, and tourism) would grind to a halt. Nonetheless, social tensions sometimes have been evident, particularly where foreigners were perceived to have threatened the Swiss way of life and to have displaced Swiss workers.

      The long-standing tradition of direct democracy (more than half of the world's national referenda have been held in the country) and federalism in Switzerland and the country's heavy dependence on foreign trade have given rise to an equally traditional dislike of state intervention and to strong and constant support for worldwide free trade. Thus, with the exception of the post office, most utilities and important services are privately owned or municipal enterprises, in some cases subsidized by cantonal governments. Formerly federally owned and operated, the telephone network and the railways were privatized in the late 1990s.

      Just as centralized bureaucracy was traditionally distrusted at home, the Swiss also have been apprehensive about economic integration with Europe. Although Switzerland negotiated a special arrangement in 1972 with the European Community (EC; now part of the European Union [EU]), it has remained outside the EU, preferring instead membership in the more limited European Free Trade Association (EFTA). In reaction to the planned removal in the early 1990s of all barriers to the movement of people, goods, and services in the EU, EFTA negotiated with the EU the creation of a new trade bloc—the European Economic Area (EEA). In 1992, however, Swiss voters narrowly rejected membership in the EEA. The vote underscored differences between linguistic groups, as French Swiss largely voted in favour of the agreement while most German and Italian Swiss were opposed to it. Subsequently, the government negotiated bilateral agreements with the EU on most topics covered by the EEA treaty. In 2000 Swiss voters ratified the new agreement.

      Linked economically with Switzerland, its smaller neighbour the Principality of Liechtenstein uses Swiss currency and enjoys the protection of the Swiss army. Nevertheless, Liechtenstein joined the EEA in 1995 (after modifying its customs union with Switzerland) and is also an individual member of EFTA.

Agriculture and forestry
 About one-third of Switzerland's land is devoted to agricultural production (grains, fodder, vegetables, fruits, and vineyards) and pasture. Some of the pastureland is used exclusively for mountain pasture, including the Monte Rosa region. The variation in soil quality within small areas in Switzerland, produced by geologic conditions and by the relief, makes large-scale single-crop farming difficult; instead, a particularly varied assortment of crops are grown in a limited space. About two-thirds of all farms combine grass and grain cultivation, and the latter satisfies nearly four-fifths of domestic demand. On the western Mittelland a considerable grain-producing area has developed on the sheltered side of the Jura Mountains, an area of scanty rainfall, while in the more humid eastern region, mainly in the cantons of Thurgau and Sankt Gallen, fodder cultivation is combined with fruit growing. Until recently the highest Alpine grainfields, which have fallen victim to the decline in Alpine agriculture, lay above Zermatt at an elevation of 6,900 feet (2,100 metres). In Ticino, the southernmost canton, a mixed Mediterranean agriculture has been attained, although it has been endangered by urbanization. Viticulture characterizes slopes along many lakes, including Geneva (Geneva, Lake), Neuchâtel (Neuchâtel, Lake), and Biel.

      With its abundant sunshine and irrigation, the Valais, especially in the Rhône valley between Martigny and Sion, is noted for cultivating berries and other fruits and vegetables. The Valais also has the largest area of vineyards of any canton and the highest vineyard of central Europe, located near Visperterminen at an elevation of 3,900 feet (1,200 metres). Switzerland's largest vineyards are on the southern-exposed shore of Lake Geneva, on the sun-facing slopes of the Rhône valley, along Lakes Neuchâtel and Biel at the foot of the Jura, and in the northern Alpine valley of the Rhine, which is affected by the foehn.

      Practiced throughout the country but especially prominent in the Mittelland and pre-Alps, cattle raising is Switzerland's primary agricultural pursuit, yielding products exported throughout Europe. The income from dairying and cattle raising amounts to more than two-thirds of all agricultural value. Products include milk, butter, cheese, yogurt, and milk for chocolate.

      As a consequence of Switzerland's economic isolation in World War II, the government provided significant subsidies for agriculture, including direct market interventions and price guarantees, to maintain a high level of domestic production. Owing to trade-liberalization policies enacted in the 1990s, however, Switzerland has modified its agricultural support system, replacing these policies with direct payments to the farmers as compensation for services in the public interest.

      Since the importance of forests (forest) for the ecology of large areas was recognized early, an exemplary forestation law forbids reduction of woodlands, which amount to about one-third of the total area of the country. Forests are vital for watershed functions, support wildlife, are a source of mushrooms, protect against avalanches, and function as recreational areas near cities such as Zürich as well as in the mountains. Furthermore, a small forestry industry that practices selective cutting supplements the income of owners of the land. Because of air pollution (pollution), some one-fifth of the country's forests have been classified as severely damaged.

Resources and power
      Although Switzerland has few natural resources (salt is the only mined resource) and lacks indigenous hydrocarbons to power its industries, high precipitation in the Alps, glaciated U-shaped valleys, the storage of glacial meltwaters behind giant dams, and the great range of elevations provide an ideal environment for the generation of hydroelectric power. The electrical industry has become an essential branch of the country's economy, with nearly 45 reservoirs and a few hundred large hydroelectric power plants in operation. Numerous low-pressure plants are situated on the lower courses of the rivers in the Mittelland. Major electrotechnical progress has occurred in the Alps, where large systems of tunnels and subterranean powerhouses have been constructed in suitable valleys. Two of the highest dams in Europe have been erected high in the tributary valleys of the Rhône in Valais: Mauvoisin is 777 feet (237 metres) high, and Grande Dixence (Grande Dixence Dam), at 935 feet (285 metres), has by far the largest-capacity reservoir in the country. Valais is the most important producer of hydroelectricity in Switzerland, with nearly one-third of installed capacity. It is also a major consumer because of the aluminum plants located in the valley of the Rhône. By the late 20th century, nearly all of the hydroelectric energy worth harnessing for power plants was being utilized. Overall, about three-fifths of Switzerland's domestic energy production is provided by hydroelectricity, while more than one-third is furnished by nuclear plants. The country's energy needs are also met by imported oil, which accounts for about half of Switzerland's total energy consumption; nuclear and hydroelectric power represent about one-fourth and one-sixth of energy consumption, respectively.

      Switzerland's transformation into an industrial state began during the second half of the 19th century. The survival of Swiss industry is based on a formula that has worked very well: build specialized products such as motors, turbines, and watches; guarantee the delivery date; offer the necessary financing through an efficient banking network; provide effective after-sales service; sell the product all over the world and thus achieve economies of scale; and, where necessary, build local factories. The chemical (chemical industry)- pharmaceutical industry, including the firms of Novartis, Ciba Specialty Chemicals, Clariant, and Roche Holdings (all with headquarters in Basel), is a good example of Swiss competitiveness. Like many Swiss industries, the chemical-pharmaceutical industry spends large sums of money on research and development. A number of firms collaborate with the country's universities and with the Federal Institutes of Technology in Zürich and Lausanne.

      Because of the single European market and world competition, Switzerland's manufacturing sector underwent major restructuring in the 1990s that included mergers, the international expansion of Swiss firms, the sale of Swiss companies to foreign firms, the closing of low-value-added types of activity, and the upgrading of technology-based activities. Despite the trend toward larger companies, Swiss manufacturing is still characterized by diversity. Most firms are small or medium-sized; they are located throughout the country but especially in the Mittelland.

      Switzerland's major exports are machinery and equipment, chemical-pharmaceutical products, watches, and textiles and apparel. Raw materials, food, vegetable oils, and fuel account for about one-quarter of total imports and are transported by rail, truck, and barge. Among other leading imports are manufactured goods, motor vehicles, and chemical products.

      Traditionally Switzerland has been among the forerunners in liberalizing and facilitating international trade, upon which its economy is heavily dependent. Most of Switzerland's trade is with the EU, with about three-fourths of its imports coming from and three-fifths of its exports going to EU countries. Among its individual trading partners, Germany is its leading market, receiving more than one-fourth of Switzerland's exports and providing about two-fifths of its imports. Other leading export markets include France, Italy, the United States, and the United Kingdom. Principal suppliers include France, Italy, the United States, and The Netherlands.

      Switzerland's official monetary unit is the Swiss franc, which is also used in Liechtenstein. A central location, political stability, and privacy laws—the Swiss Banking Law (1934) made it a criminal offense to divulge information about clients and their accounts without consent—have been key factors in making Switzerland one of the world's most important financial centres. However, secrecy laws also encouraged organized-crime syndicates to establish accounts in Swiss banks, and this has prompted modification of Swiss banking laws to prevent abuse.

      The banking system follows a two-tiered approach. One group (principally the larger banks) focuses primarily on private banking and possesses a strong international presence; the second group emphasizes national and regional banking and includes banks that are majority-owned by the cantons. The largest banks, United Bank of Switzerland (UBS AG) (UBS; created in 1998 from the merger of the Union Bank of Switzerland and the Swiss Bank Corporation) and the Credit Suisse Group, are among the largest financial institutions in the world and have branches in major cities throughout the world. With globalization, features that were once unique to Swiss banks—discretion, reliability, and a high degree of professionalism—have been emulated by the world's major financial institutions. In addition, the reduction in tensions that resulted from the end of the Cold War in the 1990s has made the safe-haven status afforded by Switzerland's neutrality less relevant. Thus, during the 1990s there was a focus on increasing the efficiency of the banking sector, which underwent consolidations and restructuring. The banking industry endured a scandal during the mid-1990s, when it was revealed that Swiss banks were still holding long-dormant accounts belonging to victims of the Holocaust during World War II. In 2000, Credit Suisse and UBS agreed to pay 2 billion Swiss francs to international Jewish organizations to be shielded from lawsuits related to such accounts. Along with banking and other financial services, there is a large sector that specializes in insurance and reinsurance (which provides insurance for the insurance companies).

      Tourism is a significant source of revenue for Switzerland, with receipts slightly outpacing expenditures by Swiss tourists abroad. Primary destinations for Swiss tourists include France, Spain, Italy, and Germany. Among the principal foreign visitors to Switzerland are Germans, who account for more than one-fourth, followed by Americans, Britons, and Japanese. A significant proportion of tourism receipts also come from residents of Switzerland.

      During the Middle Ages healing spas such as Baden, Bad Pfäfers, Leukerbad, and Rheinfelden flourished, while mountain-pass hospices such as those on the Great Saint Bernard or the Furka were the predecessors of Alpine hotels. Since World War II, travel has increased at an explosive rate: hotels, guesthouses, and vacation apartments count millions of visitors each year, as do youth hostels and campgrounds. Efforts have been made with limited success to broaden the tourist season from the peak summer and winter periods in order to reduce congestion both in the resorts and on the highways. Nearly two-thirds of overnight stays are in the Alps and the Alpine foothills. The tourist industry as a whole employs more people than are engaged in farming and is heavily dependent on foreign labour. Apart from the traditionally important retail trade component of the service sector, business-related services are a fast-growing subsector, partly reflecting the outsourcing trend in the industry sector.

Labour and taxation
      Services, including retail, trade, banking, and insurance, employ some two-thirds of Swiss workers. In contrast, manufacturing employs fewer than one-fifth of the workforce, and only about 5 percent of workers are employed in agriculture. Switzerland's unemployment rate is very low in comparison with most other countries, regularly standing at less than 5 percent. Switzerland has among the highest rates of female participation in the workforce in Europe.

      Employer-employee relations have generally been good. The Swiss Federation of Trade Unions (Schweizerischer Gewerkschaftbund), founded in 1880 and linked with the Social Democratic Party (Social Democratic Party of Switzerland), is a coalition of more than a dozen individual trade unions representing nearly 400,000 workers. Other major unions include the Swiss White-Collar Federation (Vereinigung Schweizerischer Angestelltenverbände) and the Confederation of Christian Trade Unions (Christlichnationaler Gewerkschaftsbund). With about one-fifth of workers belonging to a trade union, Switzerland has among the lowest unionization rates in Europe. Since the Great Depression of the early 1930s, the unions have generally denounced the use of strikes as economic and political weapons, and disputes are usually settled by arbitration.

      In matters of taxation, federal regulations extend mainly to customs duties, value-added tax, and a federal income tax. In general, income taxes, apart from the federal income tax, are cantonal responsibilities, and rates are fixed decisions of the voters of communal or cantonal parliaments. Although tax rates vary from canton to canton, Switzerland has among the lowest income and social-security tax rates in Europe.

Transportation and telecommunications
      Control of the most important Alpine passes and the ancient route through the Mittelland between the Rhône, Rhine, and Danube waterways has given Switzerland a key position in European transit traffic. Indeed, the main artery of European trans-Alpine traffic, the Saint Gotthard Pass, runs through Swiss territory.

      The large-scale technical undertaking of modern highway construction was preceded by the building of the railway system, which has thousands of miles of track and includes hundreds of tunnels, among them the 12.5-mile (20-km) Simplon Tunnel and the famous winding tunnels of the Saint Gotthard railway, by means of which elevation differences between valley levels are overcome. New railway tunnels have been under construction under the Gotthard and the Lötschberg for trains carrying 53-ton (48-metric-ton) trucks, thereby abating the movement of heavy vehicles through the Alpine road tunnels. Nearly all of the track in the Swiss railway system has been electrified. The Swiss Federal Railways, which constitute more than half of the system, are operated by the federal government, though in 1999 they began to function as a limited company. The remainder of the railways, including the numerous mountain railways, are distributed among scores of private railroads partially owned by the cantons and municipalities. The Vitznau-Rigi Bahn, built in 1871 as the world's first cogwheel railway, achieved early fame. The highest cogwheel railway in the world tunnels within the Jungfrau, reaching the Jungfraujoch at more than 11,400 feet (3,500 metres). Regular mainline trains link the main Swiss cities. The airports of Zürich and Geneva have their own rail stations that connect with the Swiss network. The railways account for about one-sixth of passenger and nearly three-fifths of freight traffic.

      Switzerland has among the highest numbers of automobiles per 1,000 inhabitants in Europe. Extensive use of cars has caused severe traffic and parking congestion. The network of main roads and motorways is packed, especially during the summer and winter tourist seasons, when hundreds of thousands of foreign automobiles pass through Switzerland daily. Three Alpine tunnels have been built: the Great Saint Bernard (Great Saint Bernard Pass) connects Valais with Valle d'Aosta in Italy; the 10-mile- (15-km-) long Saint Gotthard links Göschenen and Airolo under the Saint Gotthard Pass; and the San Bernardino (San Bernardino Pass) binds the cantons of Graubünden and Ticino. The dense traffic, especially in the Alpine valleys, is responsible for serious air and noise pollution.

      Since World War II, Switzerland has also maintained its own small “oceangoing fleet” of merchant ships (i.e., Swiss-owned ships that sail on the high seas). Regular service is provided on several lakes by more than 100 vessels, which include some paddle wheelers. In addition, the steamers cruising on several lakes in the summer are very popular.

      Swissair (Swiss International Air Lines), established in 1931 as the national airline, ranked among the world's major commercial carriers until financial weakness caused it to stop flying in 2002. Much of Swissair's extensive worldwide operations were sold off to other airlines or taken over by Crossair, a former regional unit of Swissair that was later renamed Swiss International Air Lines (generally known simply as Swiss). The main airports are in Zürich (Kloten) and Geneva (Cointrin). Bern (Belpmoos) and Lugano (Agno) have international flights and a few domestic flights, and Mulhouse in France is used by Basel.

      The telecommunications sector was long dominated by Telecom PTT (renamed Swisscom in 1997), which enjoyed a legal government monopoly. However, during the late 1990s Swisscom, which is still partly government owned, lost its monopoly, and the sector was liberalized and opened to free competition. The telecommunications sector, regulated by the Swiss Federal Office of Communications and the Federal Communications Commission, expanded rapidly at the end of the 1990s, with more than 100 new companies entering the market. Among the leading companies are Sunrise and Cablecom. Internet use also grew dramatically during the 1990s and early 21st century.

Government and society

Constitutional framework
      Switzerland's constitution (modeled after that of the United States) was adopted in 1848 and substantially revised in 1874. A thoroughly revised constitution, approved by three-fifths of voters, entered into force in 2000, though the changes were mainly formal, with little alteration to the structure of Switzerland's government. Because the old constitution had become immethodical and difficult to understand, the new constitution coherently incorporated the multitude of amendments passed in the previous 125 years. Switzerland's constitution contains some 200 articles, which establish the rights and duties of the citizens and of the governing bodies. It also created what has been termed a consociational democracy, which attempts to maintain political balance and stability, given the country's linguistic and religious diversity.

      The federal government supervises external and internal security, transportation affairs, forestry, and water conservation. It also is responsible for foreign policy and customs, the monetary system, the military, and social insurance programs. It has the authority to take steps to adjust the course of the economy and provide for uniform administration of justice in the areas of criminal and civil law.

      Legislative power resides in the bicameral Federal Assembly, comprising the National Council, with 200 deputies elected by a system of proportional representation for four-year terms, and the Council of States, in which each canton is represented by two deputies and each demicanton by one deputy (46 deputies in total). The executive branch is headed by the Federal Council, a seven-member collegial board. The presidency of the Federal Council rotates among the members annually, and each councillor presides over a federal department. The governments of other countries often have 20 or more ministers, and because of the Federal Council's increasing workload (domestic responsibilities coupled with Switzerland's burgeoning international commitments), there has been considerable debate about enlarging the Council or adding another level of ministers between the Federal Council and the Federal Assembly. However, Swiss voters, who would have to approve this restructuring, are fairly cautious about making such constitutional changes, especially those that might upset the very subtle balance between the different language groups.

      One of the unique aspects of Switzerland's constitution is the number of decisions it requires citizens to make through referenda and initiatives (referendum and initiative). Sovereign power ultimately rests with the people, who vote on proposed legislation several times a year at the national level and often more frequently in the cantons; indeed, Switzerland has held more than half of the world's national referenda. For example, in 1971 the constitution was amended by national referendum to grant women the right to vote in federal elections and to hold federal office, in 1991 the voting age in federal elections was reduced from 20 to 18 years, and in 2002 voters endorsed entry into the United Nations (UN). Referenda must be held on constitutional matters and major international treaties; voters may also call a referendum to challenge a law passed by the Federal Assembly by obtaining 50,000 signatures within 100 days of passage. For a referendum to pass, it must receive an overall majority both of the national vote and in a majority of the cantons. In addition to referenda, Swiss citizens can call a national vote on any issue by collecting 100,000 signatures. The first such initiative was undertaken in 1893, when voters decided against the wishes of the parliament and endorsed the prohibition of the killing of animals according to Jewish religious methods. More recently, voters have cast ballots on whether to join the European Economic Area (rejected), eliminate the Swiss army (rejected), reduce military spending (rejected), limit the foreign population of the country (rejected), conserve moorland (approved), and require that trucks passing through the country be put on railroad flatbeds (approved). The Swiss model has provided citizens with a direct voice in their own affairs that is without parallel in any other country, but it has sometimes been criticized on various grounds: voter turnout is often very low, averaging about two-fifths of the electorate; it often makes the passage of important legislation difficult (e.g., the parliament passed a law granting women the right to vote in 1959, but voters did not approve the change at the federal level until 12 years later); and it raises the prospect that the rights of minority groups can be undermined by a majority of the population, though Swiss voters in practice have generally respected the rights of minorities.

Cantonal and local government
      The Swiss Confederation is divided into 26 cantons (canton) (including six demicantons, or Halbkantone, which function as full cantons), each of which has its own constitution and assembly. The cantons exercise broad authority, possessing all powers not specifically given to the federal government. Education and health policies are largely determined at the cantonal level. While historically several cantons had a Landsgemeinde, only Appenzell Inner-Rhoden and Glarus maintain this traditional assembly consisting of all the canton's citizens that meets annually and serves as the canton's primary decision-making body.

      The Swiss Confederation consists of some 3,000 communes, which are responsible for public utilities and roads and, like the cantons, are largely autonomous. Communes range in size from Bagnes in Valais, with an area of 109 square miles (282 square km), to Ponte Tresa in Ticino, with an area of 0.1 square mile (0.3 square km). They also vary considerably in population; many have only several hundred residents, while the commune of Zürich has more than 350,000 residents. From the multiplicity of small communal republics stem a special quality to each and, paradoxically, a basis of national unity, for each citizen treasures and supports the freedom of the commune, a shared conviction that unites a citizen with the rest of the population in a way that transcends differences of language and of party. It is the communes rather than the country that grant Swiss citizenship.

      The Swiss Civil Code of 1912 has furnished a model for the administration of justice in many countries; indeed, parts of the code have been adopted verbatim in other legal systems. The difficult task of creating and preserving a uniform judicial system within so diverse a national structure has produced a number of great jurists and experts of international law. Each canton elects and maintains its own magistracy for ordinary civil and criminal trials. Supreme judicial power is vested in the Federal Supreme Court (Bundesgericht), the seat of which is in Lausanne. Members of the court are elected by the Federal Assembly to six-year terms. capital punishment was abolished—except under circumstances of martial law, general mobilization, or war—by the unified federal penal code of 1937.

Political process
      All citizens at least age 18 are permitted to vote; however, Switzerland has among the lowest levels of voter participation among long-established democracies. From the 1950s into the early 21st century, Switzerland's government was formed by a grand coalition of four parties—the Radical Democratic Party, the Social Democratic Party (Social Democratic Party of Switzerland), the Christian Democratic People's Party, and the Swiss People's Party (Centre Democratic Union). These parties have combined to retain comfortable majorities in the National Council (often winning more than four-fifths of the seats) and generally have contributed all the members of the Council of States. Members of the Federal Council, with its rotating presidency, are selected with the intent of providing equitable political, religious, and linguistic representation. Despite its long tenure, the coalition was beset by increasing internal conflicts at the end of the 20th century. The Swiss People's Party, which had held one seat on the Federal Council since the 1950s, adopted positions that were considered by some to be antiforeigner and anti-European; it became the largest party in the Federal Assembly in 2003 and was awarded an additional seat on the Federal Council. In 2007 the Swiss People's Party withdrew from the grand coalition. This end to nearly a half century of consensus government was only temporary, however: a year later, a member of the far-right party regained a seat on the Federal Council.

      Although denied voting rights at the federal level until the 1970s, women are now fully engaged in politics and regularly constitute about one-fifth of the representatives in the Federal Assembly. Ruth Dreifuss was the first woman to serve as president, holding the office in 1999.

      Policing is generally the responsibility of the cantons, though larger cities also maintain municipal police forces. A small federal police corps enforces special federal laws concerning such crimes as treason and forgery (mainly in collaboration with cantonal police). There has been considerable debate about increasing the scope and size of the federal police to combat crimes that transcend cantonal boundaries, but such a change would require the agreement of the cantonal governments.

      In accordance with Switzerland's neutrality, which dates from the 16th century and in 1815 became international law, the army serves solely to preserve the country's independence. Defense is based on a system of universal conscription under which every Swiss male begins performing military duty at age 20 as a member of the national militia and remains active until age 42; officers remain active until age 52. The training of recruits is followed by 10 three-week refresher courses. Swiss women may serve as volunteers in the women's military force. Unlike soldiers in other countries, Swiss soldiers keep their equipment, including arms and ammunition, at home and perform obligatory gunnery duty each year in civilian clothes, a manifestation of the extraordinary degree of trust between citizen and government.

      Although deeply rooted in Swiss history, both the militia system and neutrality were increasingly questioned at the end of the 20th century. For example, in 1989 more than one-third of the electorate (including majorities in Jura and Geneva) voted in favour of abolishing the army, and neutrality—once a fully convincing concept for a small country surrounded by conflicting powers—has lost much of its justification in the geopolitical situation of the beginning of the 21st century. Thus, Swiss voters, who had overwhelmingly rejected entry into the UN (United Nations) in the mid-1980s as a violation of the tradition of neutrality, endorsed entry in 2002.

Health and welfare
      Public welfare services in Switzerland have evolved in a way typical of federalism, developing first in the communes, then in the cantons, and later in the confederation. Social welfare support is primarily a communal task, sometimes in cooperation with the cantons. Social insurance, which had existed in some communes, was introduced at the federal level by a series of constitutional amendments, the most important of which was compulsory social-security (social security) insurance (introduced in 1948). Financed through the contributions of workers and their employers, as well as smaller contributions from the cantons and the confederation, social-security insurance provides annuities and pension allowances to senior citizens (men over 65 and women over 62) and to widows, orphans, and invalids. Because this legislation did not cover the cost of living, a system of mandatory occupational pensions was later introduced, financed by both employers and employees. In 1985 a voluntary employee-funded private pension plan was established, encouraged by tax incentives.

      Unemployment insurance is federal, financed by contributions from employees and employers. health insurance is compulsory; though a legal framework has been established on the federal level, the health system is largely organized along cantonal lines, and health contributions vary considerably between cantons. The Swiss Confederation and the cantons together finance additional support for the destitute out of general revenues. Overall, the level of social welfare spending is substantial, accounting for more than one-fourth of total expenditures, and care and services are among the best in the world.

      Drug use is considered an important health problem, with many youths regularly using marijuana and other drugs. To resolve drug-related issues, Switzerland adopted a unique approach, controlling drug delivery to the severely addicted without legalizing drugs. The strategy has resulted in better care for addicts, a reduction in the drug-abuse rate, and an increase in public safety.

      Because of its distinct cultural differences, Switzerland provides varied examples of geographic settlement patterns, with traditional housing types differing from one region to another. For example, smooth stone houses are typical in the Engadin, small stone buildings in Ticino, the combination house and barn in the Mittelland, the distinctive shingled facades in Appenzell, and the wooden villages of the valleys of Valais canton.

      The housing stock in Switzerland is relatively modern, with more than two-thirds built since 1947. Despite the country's high population density, dwellings are fairly large; about one-fourth of homes have more than five rooms. With about one-third of all dwellings owner occupied, Switzerland has among the lowest home ownership rates in Europe. This low figure is partially the result of the country's high population density and scarce land, which has inflated the value of land, combined with an unequal income distribution—factors that have made it impossible for a majority of the population to acquire a dwelling.

      Switzerland's 1874 constitution gave sovereignty over education to each canton or demicanton. Elementary education is free and compulsory between the ages of 7 and 16. The confederation provides financial assistance for vocational training and the cantonal universities, regulates examinations for the professions, and influences the curriculum of the secondary schools. The only institutions of higher education maintained by the confederation itself are the Federal Institutes of Technology at Zürich (founded 1855) and Lausanne (founded 1853 and federalized 1969). Among the country's most prominent institutions are the Universities of Basel (founded 1460), Bern (established as a seminary in 1528 and as a university in 1834), Geneva (founded 1559), Lausanne (founded 1537), and Zürich (founded 1833). The interior department in Bern administers education, and there is an education department in every canton.

      The combination of an Alpine landscape, the pedagogic reputation of educational theorists such as Jean-Jacques Rousseau (Rousseau, Jean-Jacques), Johann Heinrich Pestalozzi (Pestalozzi, Johann Heinrich), and Jean Piaget (Piaget, Jean), and the multicultural nature of the country has prompted many private schools, at all levels, to locate in Switzerland.

Cultural life

Cultural milieu
      Although Switzerland is small and relatively isolated from more well-recognized cultural centres, it nevertheless can boast an impressive list of contributors to the arts and sciences. For example, Switzerland has won more Nobel Prizes and registered more patents per capita than any other country, and the country abounds in cultural institutions, museums, and libraries, all well supported with federal funds. However, because of limited opportunities at home, some of Switzerland's most creative minds—for example, architect Le Corbusier (Corbusier, Le) and painter Paul Klee (Klee, Paul)—went elsewhere to work. On the other hand, Switzerland's traditional neutrality and its laws of political asylum have made the country a magnet for many creative persons during times of unrest or war in Europe. For example, writers such as the English poet George Byron (Byron, George Gordon Byron, 6th Baron), the Irish novelist James Joyce (Joyce, James), the Romanian-born French poet Tristan Tzara (Tzara, Tristan), and the French writer Voltaire resided in Switzerland, and, in the 1930s and '40s, the rise of fascism caused a number of German, Austrian, and Italian writers such as Thomas Mann (Mann, Thomas), Stefan George (George, Stefan), and Ignazio Silone (Silone, Ignazio) to seek harbour in Switzerland.

      Switzerland's geographic centrality in Europe is reflected in its role as Helvetia mediatrix (“Switzerland the mediator”). The spirit of Henri Dunant (Dunant, Henri), the founder of the International Committee of the Red Cross, lives on in the continued sense of a distinct mission of cultural union that is shared by many Swiss, a mission also revealed in the country's extensive foreign-assistance programs for less-developed countries. Since the 1990s, with the end of the Cold War and the collapse of the bipolar division of the world, Switzerland has had to reevaluate and redefine this traditional role. It can no longer serve as a go-between for the major power blocs; instead, international peace initiatives are often now embedded in institutions such as the UN or the EU, and, until it joined the UN in 2002, Switzerland was a member of neither.

      If a “Swiss culture” can be spoken of in its broader implications beyond the arts, distinctive French, Italian, and German cultural circles must be recognized, as well as a Rhaeto-Romanic culture, which has been threatened by the increasing influence of the German language in the Romansh parts of eastern Switzerland, spread largely through the medium of television. It is mostly the common political and institutional visions—federalism, direct democracy, individualism, and the will not to be dominated by the surrounding large, often centralist countries—that both unite the Swiss and constitute their culture.

      Some see the influence of the mass media as a threat to Swiss culture and tradition, both because of its homogenizing effects and because the different language groups can now receive and be influenced by television and radio in their respective cultural hearths of Germany, France, and Italy. These critics stress the important role of the national radio and television corporation in maintaining and nurturing a common understanding among all Swiss.

Daily life and social customs
      Switzerland has often seen itself, or has been seen by others, as a “special case” (Sonderfall), largely because of multilingualism, its diversified cultural patchwork, and its institutions, but also because of its economic success after World War II. Although some of the political and institutional peculiarities still persist, the rapid modernization of daily life in Switzerland is reflected in changes in the country's habits and cuisine.

      Swiss cuisine has traditionally been marked by important cultural and regional variations. Cheese dishes are typical of the Alpine regions. The national dish, fondue neuchâteloise (fondue) (a mixture of melted Emmentaler and Gruyère cheeses and wine into which bread cubes are dipped), and raclette (cheese melted over a fire and scraped over potatoes or bread) are popular not only throughout the country but in much of the world. The Swiss chocolate industry, which originally grew out of the need to utilize the abundant milk produced in the pre-Alpine dairying regions, is world famous. Also popular are spiced, glazed honey cakes known as Leckerli. The preferred dish of German Switzerland is Rösti (fried shredded potatoes), but sausages and sauerkraut are also popular. Other popular dishes include Zürcher Eintopf, or Zurich-style beef stew, and, around the lakes of eastern Switzerland, the delicate fish Zander (pike perch). Specialty and seasonal dishes, such as the autumn bratwurst from Sankt Gallen, distinguish one region from another, as do the country's abundant wines and beers (which now include Maisgold, or beer made from corn).

      Western Switzerland is influenced by French cuisine and culture, and in Ticino pasta, polenta, and risotto are signs of a common culture with Italy. Despite the longevity of traditional culinary influences, modern Swiss cuisine is characterized by international trends, and restaurants with cuisines from all over the globe can be found even in smaller cities. There are many American fast-food chains, even in Alpine resorts such as Zermatt and Saint Moritz.

      Visitors to Switzerland go there to eat, but more go to shop, especially along Zürich's famed Bahnhofstrasse, an avenue that is home to both fine shops—including the country's renowned jewelers and watchmakers—and leading banks. Along the Bahnhofstrasse, shoppers can find Switzerland's famous timepieces, local handicrafts, and books as well as dine in elegant cafés. Each city and town of any size has a similar venue, and some have more than one shopping district; for example, just across the Limmat River from the Bahnhofstrasse lies Zürich's youth-oriented Niederdorfstrasse, which features bistros, shops, and ethnic restaurants.

      In general, the habits of city dwellers mirror those of urbanites in other parts of the world. Typical Swiss folk culture (e.g., yodeling (yodel) and playing the alphorn) is still practiced in some rural areas. Early autumn's annual Alpabzug, in which cattle are driven from Alpine pastures to lower elevations, is the occasion for rural fairs and auctions that emphasize rural traditions, and many cities and larger towns host farmers' markets that join urban and rural areas. Stand wrestling ( Schwingen), in which combatants wear wrestling breeches, can be seen in many regional festivals, and in some mountain villages, such as in Valais, traditional rural costumes are sometimes worn.

      Family and household structures have considerably changed since the mid-20th century. The divorce rate nearly quadrupled between 1960 and the turn of the 21st century. The proportion of family households dropped, a reflection of both an increase in divorce rates and an aging population.

      Swiss tradition survives in the country's many holidays and festivals. Fasnacht (Fasching) (Carnival), which marks the beginning of Lent, is celebrated in late winter throughout the country, with Basel's parades being of particular note. Although costumes and music are common features, Fasnacht exhibits regional variations, and in some places celebrants are adorned with masks said to chase away evil spirits. Masks are also part of Sylvesterkläuse (New Year) celebrations, particularly in rural Switzerland. Spring is marked by the burning of the Böögg during a festival that dates from 1818, when a guild held a parade replete with music and horses. The festival, which marks the end of winter, terminates with the burning of a large woodpile topped by a snowman. Throughout the fall there are various harvest and wine festivals. A popular holiday in Geneva is the Escalade, which is celebrated in December and marks the city's victory over the duke of Savoy in 1602. August 1 is National Day (German: Bundesfeier; French: Fête Nationale; and Italian: Festa Nazionale), which commemorates the agreement between representatives of the Alpine cantons of Uri, Schwyz, and Nidwalden, who signed an oath of confederation in 1291. The holiday itself, however, dates only from 1891, and it became an official federal holiday in 1993. Other official holidays are religious in origin, and many of them, such as Whit Monday and Assumption, are observed in only some cantons.

The arts and sciences
Folk arts
      Folk arts in Switzerland include music, poetry (usually song), dance, wood carving, and embroidery. In the cattle-breeding northern areas, there are many traditional forms of song and music (folk music), involving, for example, the yodel, a type of singing in which high falsetto and low chest notes are rapidly alternated. There are also trumpetlike instruments made of wood and bark, the epitome of which is the alphorn. Folk music in mainly pastoral areas has wide-ranging, floating melodies, whereas, in the crop-growing regions of the inner and southern Alps, more-songlike melodies of limited range are common. The most frequent themes are love and longing for the homeland, as well as historical, patriotic, pastoral, and hunting themes. The vitality of the Alpine folk culture can also be seen in dances (folk dance) such as the Ländler, which is somewhat similar to the waltz, and the Schuhplattler and in small musical ensembles such as the fife-and-drum presentations in Valais.

      Wood carving consists partly of chip carving for the decoration of everyday objects, such as milking stools, neckbands for bells, wooden spoons, and distaffs, and partly of figure carving, especially of Nativity figures. Decoration of house facades with religious sayings is widespread in Protestant Alpine areas (in Berner Oberland and parts of Graubünden), but it can also be found in Roman Catholic regions, such as German-speaking upper Valais. embroidery has been particularly prominent in such elements of traditional women's clothing as cuffs, stomachers, hats, and scarves. It has been a traditional home industry in parts of northeastern and eastern Switzerland.

      The 12th-century Romanesque architectural style found particularly rich expression in the cathedrals of Geneva, Basel, Lausanne, Sion, and Chur and in the many castles and fortresses. The Gothic style was expressed in the cathedrals of Zug, Zürich, and Schaffhausen. Notable examples of Baroque churches are located in Einsiedeln, east of Zug, and in Sankt Gallen. During the Renaissance many architectural masters, especially from Ticino, practiced their craft in Italy: Antonio da Ponte (Ponte, Antonio da) built the prisons near the Doge's Palace and the Rialto Bridge in Venice; Antonio Contino built Venice's Bridge of Sighs; Domenico Fontana (Fontana, Domenico) designed the whole of the Lateran Palace, the facade of St. John Lateran Church, and the Royal Palace in Naples; his nephew Carlo Maderno (Maderno, Carlo) became architect to Pope Paul V; Francesco Borromini (Borromini, Francesco) built San Carlo alle Quattro Fontane, the gallery of the Spada Palace, and the Filippini monastery and modified the Falconieri and Barberini palaces; Carlo Fontana (Fontana, Carlo) built the facade of San Marcello al Corso and the Montecitorio Palace; Baldassare Longhena (Longhena, Baldassare), from Moroggia, built the church of Santa Maria della Salute, the Rezzonico, Pesaro, and Widmann palaces, the church of Ospedaletto, and the interior of the church of Scalzi, all in Venice. Later, G.B. Gilardi rebuilt the Kremlin in Moscow; his son Domenico rebuilt the Moscow State University and a number of the city's palaces. In the 20th century Le Corbusier (Corbusier, Le) (Charles-Édouard Jeanneret) was one of the major creative forces behind the International school of architecture that dominated most building trends throughout the West. More-recent prominent Swiss architects include Mario Botta from Ticino, who designed the San Francisco Museum of Modern Art; Jacques Herzog and Pierre de Meuron from Basel, who transformed an old power station into the Tate (Tate galleries) Modern gallery in London; and Peter Zumthor from Graubünden, who is renowned for his wood and stone architecture.

 The Protestantism of 16th-century Switzerland had a strongly inhibiting effect on Swiss painting and sculpture in general; in that climate Hans Holbein the Younger (Holbein, Hans, the Younger), a German artist who did much of his work in Switzerland, chose to leave his base in Basel for London. Later Swiss expatriates who moved to London to ply their trade included the Neoclassical painter Angelica Kauffmann (Kauffmann, Angelica) and Henry Fuseli (Fuseli, Henry) (Johann Heinrich Füssli). Other artists of international renown include Alberto Giacometti (Giacometti, Alberto), who derived much of his inspiration from the Etruscans; Jean Tinguely (Tinguely, Jean), whose complex moving sculptures were constructed from scrap; and Paul Klee (Klee, Paul), perhaps Switzerland's most original and impressive painter. Creative photography and graphic arts flourish, examples of which can be seen on calendars, in magazines, in museums, and on the outdoor advertisements that are found throughout the country, especially in train stations. In the early 20th century the influential Dada arts movement emerged in Switzerland, centred on Zürich's Cabaret Voltaire. Today, galleries across the country represent Swiss artists, and Basel's annual art fair has emerged as a clearinghouse for their work.

      Pioneering Swiss photographers include the brothers Edouard and Auguste de Jongh, Paul Senn, and Robert Frank (Frank, Robert). Important photographic repositories and museums are located in Lausanne, Winterthur, and Zürich.

      Switzerland has a small film (motion picture) industry, characterized by movies both entertaining and profound that feature excellent acting and superb photography. The industry benefited during the 1930s and '40s from the influx of immigrants, particularly those from Austria and France, who fled persecution by Nazi Germany. In the 1960s Switzerland passed legislation that provided generous subsidies to the film industry, and that decade saw the emergence of a distinctly Swiss documentary tradition, enhanced by the expansion of television and the need for local programming. There are annual international film festivals in Locarno, Nyon, and Fribourg. Each winter, Swiss productions are highlighted at the well-attended film workshop in Solothurn.

      “In Switzerland, writing is only possible as an export business,” Friedrich Dürrenmatt (Dürrenmatt, Friedrich), one of the few internationally known Swiss authors, once remarked. The country's small population and four official languages have worked to make it difficult for any single writer to enjoy widespread success or, perhaps more important, significant income, and most Swiss writers are little recognized elsewhere in Europe. Even though Switzerland today publishes thousands of books each year, many of the country's literary successes date to previous centuries with such figures as the Swiss-born French Enlightenment philosopher Jean-Jacques Rousseau (Rousseau, Jean-Jacques), the French-born memoirist and hostess Germaine de Staël (Staël, Germaine de), whose home at Coppet became a centre of European literary life, and the noted 19th-century historian of art and culture Jacob Burckhardt (Burckhardt, Jacob), whose Civilization of the Renaissance (1860) remains influential.

      Other writers to enjoy international success include Johann Rudolf Wyss (Wyss, Johann Rudolf), who completed and edited his father's novel Swiss Family Robinson (1812–27); Johanna Spyri (Spyri, Johanna), author of Heidi (1880–81); Dürrenmatt, whose play Der Besuch der Alten Dame (1956; The Visit) was made into a film (1964); and Max Frisch (Frisch, Max), author of Homo Faber.

      Prominent among other Swiss nationals who wrote in German (German literature) were the German-born Hermann Hesse (Hesse, Hermann), whose novel Siddartha (1922) was a classic carried by many travelers to India, and poet Carl Spitteler (Spitteler, Carl), whose epics were inventive and powerful; both won the Nobel Prize for Literature, Spitteler in 1919 and Hesse in 1946. Other leading figures include narrative writer Gottfried Keller (Keller, Gottfried), poet Conrad Ferdinand Meyer (Meyer, Conrad Ferdinand), and novelist Robert Walser, and many exemplify the literary critic Karl Schmid's remark that the leitmotiv of 20th-century Swiss literature is “the malaise of a small nation.”

      Contemporary German-Swiss writers include Erika Burkhart, Helen Meier, Thomas Hürlimann, and Peter Stamm. The leading figure in modern French-Swiss literature is Charles-Ferdinand Ramuz (Ramuz, Charles-Ferdinand). Other writers in French include Guy de Pourtalès, Blaise Cendrars (Cendrars, Blaise), Denis de Rougemont, Anne Perrier, and Yves Laplace. Italian-Swiss writers enjoy close connections with neighbouring Italy. Among them are Francesco Chiesa, whose work depicts rural life in the Ticino, poets Giorgio Orelli and Alberto Nessi, and novelists Anna Felder and Fleur Jaeggy. Some writers, such as Alina Borioli and Ugo Canonica, write in dialect.

      Romansh (Romansh language) literature stretches from its origins in medieval ecclesiastical writing to the late modern contributions of anthropologist Caspar Decurtins, poets Peider Lansel, Jon Guidon, and Artur Caflisch, and fiction writer Giachen Michel Nay.

      Switzerland was also among the leading centres of the Protestant Reformation during the 16th century and was home to such influential theologians as Huldrych Zwingli (Zwingli, Huldrych), Johannes Stumpf (Stumpf, Johannes), and the French-born John Calvin (Calvin, John). Karl Barth (Barth, Karl) was one of the most important theologians of the 20th century.

      Church music dominated Switzerland until the 17th century, and in Protestant areas music was strictly controlled during the Reformation. In the 19th century a vibrant music scene developed. A conservatory was established in Geneva in 1835, and choral music was performed at various festivals, such as the Winegrowers Festival (Fête des Vignerons), which is still held in Vevey approximately every 25 years. Although Switzerland has not been at the forefront in music, it has produced several composers of international renown, such as the 20th-century figures Arthur Honegger (Honegger, Arthur), Othmar Schoeck (Schoeck, Othmar), and Frank Martin (Martin, Frank). Under the direction of Ernest Ansermet, the Swiss French Orchestra (Orchestre de la Suisse Romande) was at the forefront of bringing modern musical culture to Swiss audiences, and today major orchestras serve Zürich, Geneva, Lausanne, Biel, Bern, Basel, Lucerne, Lugano, Winterthur, and Sankt Gallen. Switzerland is home to a number of international music festivals. The International Festival of Music, held in late summer in Lucerne, is a leading classical event, and the annual Montreux Jazz Festival attracts a large international audience. There are also numerous American country and western, jazz, and pop events throughout the year, and rock music—including a thriving scene in the national languages—is served by numerous nightclubs and performance spaces.

      Swiss theatre historically has been dominated by religious themes, such as in the Baroque Lucerne Easter Play. During the 18th century the government suppressed the performing arts, but in the 19th century patriotic plays emerged, such as those glorifying Swiss legendary hero William Tell (Tell, William) (Tellspiele), and led to the construction of large municipal theatres throughout the country. During the Nazi period in Germany (1933–45), Zürich's Schauspielhaus (German: “Playhouse”) was an important centre for theatre, where many refugee writers, directors, and actors performed or staged productions. The country's two most successful postwar dramatists, Max Frisch and Friedrich Dürrenmatt, staged their debut works at the Schauspielhaus, and contemporary playwrights such as Maja Beutler, Thomas Hürlimann, and Matthias Zschokke have worked there and at other theatres throughout Switzerland.

      In French-speaking Switzerland, theatrical works are often performed in schools and other “offstage” settings. Similarly, there are several independent theatrical troupes in the country's Italian- and Romansh-speaking cities and towns, which have no major municipal theatres. Zürich, Geneva, and Lausanne have opera houses. There are professional ballet ensembles in these cities and Basel, as well as several modern dance troupes.

      Swiss scientists have included Paracelsus (Theophrastus Bombastus von Hohenheim), who in the 16th century brought chemistry into the field of medicine; Daniel (Bernoulli, Daniel), Jakob (Bernoulli, Jakob), and Johann (Bernoulli, Johann) Bernoulli of Basel, who made significant contributions to mathematics; the innovative mathematician Leonhard Euler (Euler, Leonhard); the naturalist and pioneer Alpine scholar Horace Bénédict de Saussure (Saussure, Horace Bénédict de); and the Nobel Prize-winning chemist Alfred Werner (Werner, Alfred). Zürich's Federal Institute of Technology has produced many Nobel Prize winners, among them physicists Albert Einstein (Einstein, Albert), Wolfgang Pauli (Pauli, Wolfgang), and Heinrich Rohrer (Rohrer, Heinrich). Switzerland has also nurtured some of the leading social scientists of the modern age, including economist Jean-Charles-Léonard Simonde de Sismondi (Sismondi, J.-C.-L. Simonde de), linguist Ferdinand de Saussure (Saussure, Ferdinand de), and psychologists Jean Piaget (Piaget, Jean) and Carl Jung (Jung, Carl).

Cultural institutions
      The arts are championed by renowned museums not only in cities such as Basel, Zürich, and Geneva but also in small towns such as Winterthur and Schaffhausen, which are cultural bastions far beyond the usual provincial standards. One example is the Pierre Gianadda Foundation, built over Roman ruins in Martigny. Opened in 1978, it has become renowned for the quality of its exhibitions of international artists, including Pablo Picasso, Marc Chagall, Henry Moore, and Auguste Rodin. Museums of particular note are the Swiss National Museum, which houses many exhibits on Swiss culture and history, and the Museum of Fine Arts (Kunsthaus), with a range of collections from religious to modern art, in Zürich; the International Red Cross and Red Crescent Museum, the Museum of Art and History, which houses some 500,000 items, the Petit Palais, which has a small but excellent collection of modern art, and the Voltaire Museum, in Geneva; and the Transport Museum in Lucerne.

Sports and recreation
      Sports are an integral part of Switzerland's national life. The Swiss Olympic Association, the national clearinghouse for sports activities, estimated that its membership embraced some 3.5 million individuals and more than 25,000 separate organizations at the start of the 21st century, and nearly every commune in the country boasts several sports clubs, from mountaineering to football (soccer) to windsurfing. Local competitions are abundant, the most famous of which is the annual Knabenschiessen festival, held in Zürich each September, bringing teenagers together to compete in archery and other shooting events. Along with regular Sunday-morning shooting, other sports played in the country include Swiss-style wrestling (Schwingen), gymnastics, Hornussen (a kind of Alpine baseball), tennis, golf, ice hockey, basketball, floor handball, gliding, paragliding, hang gliding, sailing, and swimming. There is fishing in the lakes and rivers, and, when certain mountain lakes freeze over, they are used for curling and even horse racing.

 Fittingly for a country made up largely of tall mountains, Switzerland abounds in venues for winter sports. The country boasts dozens of major ski resorts and has an extensive system of marked cross-country ski trails. Swiss athletes have performed with excellence at every level of winter-sports competition and notably at the Winter Olympic Games. Switzerland hosted the Winter Olympic Games at Saint Moritz in 1928 and again in 1948. The 1928 Games were marred by unusually warm weather, which forced the cancellation or postponement of several events; the 1948 Games were, however, among Switzerland's finest moments in sports, with Swiss athletes winning 10 medals. Swiss athletes have performed particularly well in curling at the Winter Games and in such summer events as rowing, shooting, volleyball, swimming, cycling, and gymnastics.

      The western Swiss city of Lausanne has been the home of the International Olympic Committee since 1915. The city is also the site of the remarkable Olympic Museum and is the headquarters of a number of international sporting organizations and events, including the Athletissima track and field competition and the Lausanne Marathon.

Media and publishing
      Since the adoption of the Swiss constitution in 1874, the press has enjoyed considerable freedom, and, except in cases of national security, journalists are permitted not to reveal their sources of information. Given the country's linguistic and regional diversity, there are a wide variety of newspapers. About two-thirds of newspapers are published in German; one-fourth are printed in French; and smaller proportions of Switzerland's newspapers are published in Italian and Romansh. Most newspapers have a regional scope; among the leading daily newspapers are the Tribune de Genève and Le Temps in Geneva; Basler Zeitung in Basel; and Tages Anzeiger Zürich, which has the country's largest circulation, and the Neue Zürcher Zeitung, which is widely respected for its international coverage, in Zürich. Most Swiss newspapers and other media offer editions on the World Wide Web, whose access protocols and display standards were originally developed at the Geneva-based CERN (European Organization for Nuclear Research).

      Much of modern cultural life has been influenced by television. Both television and radio are dominated by the private nonprofit Swiss Broadcasting Corporation (Société Suisse de Radiodiffusion et Télévision), which has three distinctive networks for the German (including Rhaeto-Romanic), French, and Italian parts of Switzerland. While representing their respective cultures, they include many programs from France, Germany, and Italy. French-language television also includes shows from Canada and Belgium, whereas the German-Swiss network also presents programs from Austria. There are also a variety of other radio and television stations that operate along regional lines, and Swiss Radio International broadcasts internationally in several languages. Commercial television faces difficulties, owing to Switzerland's small and diverse market. American television and movies heavily influence domestic programming. Cable television, reflecting the Europeanization of Switzerland, has brought a wide variety of additional programming.

Emil Egli Aubrey Diem Daniel Wachter

      Switzerland's history is one of a medieval defensive league formed during a time and in an area lacking imperial authority. The different cantons (canton) (traditionally called Orte in German) were to a large extent independent states that remained united through the shared defense of liberty, which was understood as the protection of imperial privileges and franchises. Unlike all similar confederations (e.g., the Hanseatic (Hanseatic League) and Swabian leagues) and despite endemic internal strife, especially after the Reformation in the 16th century, the Swiss Confederation survived the formation of (princely) modern states without adapting to it. With Venice, Genoa, and the Netherlands (Netherlands, The), the confederation formed the republican exception in Europe, and it developed political structures less as a unified nation than on the level of the 13 cantons that the Swiss Confederation comprised by the time of the Reformation. The early modern confederation also included, with reduced say, the Zugewandte Orte, districts and towns (such as Geneva and Graubünden) that were allied to and subsequently became a party of the confederation. Switzerland was (along with San Marino) the only early modern republic to survive the reign of Napoleon I. It modernized its political structures in its 1848 constitution, successfully adopting liberal principles such as individual rights, separation of powers, and parliamentary bicameralism enshrined in the French Revolution (1789) and the U.S. Constitution (Constitution of the United States of America). In the preceding period of crisis from the end of the 18th century to the mid-19th century, the confederation integrated the French- and Italian-speaking cantons and large rural areas, which earlier had been dominions of oligarchic or democratic regimes. Thus, Switzerland avoided breaking apart like other traditional states on mountain ridges such as Navarre (Navarra) or Savoy, which were destroyed by the idea of “natural boundaries,” or the Habsburg empire (Habsburg, House of), which was eventually torn apart and reduced to its German element by those espousing nationalism. A product of the European balance of power (power, balance of) and, after 1499, attacked only once (1798), Switzerland has enjoyed peace for most of its existence and was spared from two world wars in the 20th century, when the gradually developed concept of “armed neutrality” was respected by its neighbours. Economic prosperity largely followed as Switzerland adapted well to the Industrial Revolution and the growth of international finance markets, despite internal social strife in the decades around the turn of the 20th century.

Switzerland before confederation
Prehistoric Switzerland
      Until the late Middle Ages, the territory constituting modern Switzerland never formed a single political or cultural unit. The first stone implements discovered in Switzerland are more than 250,000 years old, and early human Neanderthal hunting settlements date from about 50,000 BC. During the last glacial period in Alpine Europe, the Würm (Würm glacial stage) stage, which began about 70,000 years ago, the country was covered with ice, many thousands of feet deep, that flowed down from the Alps. Animal figures carved on antlers and bones (e.g., those found in Kesslerloch date from about 10,000 BC) prove that during interglacial periods nomadic hunters had camps in caves of the ice-free areas of the Jura and the Mittelland and followed their prey, mainly reindeer and bear, into the high mountain valleys. Toward the end of the Würm, about 12,000 BC, Homo sapiens appeared; after the melting of the glaciers, Neolithic (Neolithic Period) cultures established corn (maize) growing and animal breeding in parts of the Rhône and Rhine valleys (about 5000 BC). From about 1800 BC, Bronze Age settlements were scattered throughout the Mittelland and Alpine valleys.

Celtic (Celt) Switzerland
      During the Iron Age, from about 800 BC on, the area that was to become Switzerland was inhabited by Celts in the west and Raetians in the east. A rough boundary between the tribes ran from Lake Constance to the San Bernardino by way of the Linth valley. Much of what is now known about the Celts in western Europe during the period from approximately 400 to 50 BC was pieced together from information and artifacts gleaned from excavations at the lakeside encampment of La Tène, near the modern city of Neuchâtel. The Celts were noted for their metalwork, original ceramics, and superb jewelry crafted from gold. They first lived on single farms or in villages (of about 400 inhabitants, according to Caesar), and later they established larger towns (oppidum). Most of the cities of the Swiss Mittelland and of the transverse Alpine valleys were originally settled by Celts.

      The Helvetii, one of the most powerful of the Celtic tribes, controlled much of the area between the Jura and the Alps. Because of pressures from Germanic tribes, they attempted to migrate to southwestern Gaul in 58 BC but were denied permission by the Romans (ancient Rome). Defeated by Julius Caesar at Bibracte (modern Mont Beuvray, France) in the opening campaign of the Gallic Wars, the Helvetii survivors returned to their Swiss lands as dependent but privileged allies (foederati) of Rome and thus filled a vacuum that otherwise might have precipitated further Germanic encroachment.

Roman (ancient Rome) Switzerland
      Caesar Augustus (Augustus) annexed present-day Switzerland to the Roman Empire in 15 BC. The Romans enlarged old Celtic settlements or built new military camps and towns, such as Augusta Raurica (now Augst), on the Rhine east of Basel; Genava, Julia Equestris (Nyon), and Lousonna (Lausanne), on the shores of Lake Geneva; Aventicum (Avenches), near Lake Morat; Eburodunum (Yverdon), on the southwest shore of Lake Neuchâtel; and Vindonissa (Windisch) and Turicum (Zürich), where the Limmat flows north out of Lake Zürich (Zürichsee). The Romans improved water supplies and constructed arenas and theatres, the best examples of which may be seen at Augst and Avenches. Villas (villa), a type of fortified farmstead, were built, providing bases for agricultural exploitation and for spreading Roman influence into the surrounding countryside.

      New fruits, plants, and vegetables were brought from the south. The grapevine was introduced despite attempts by Roman legislators to prevent wine from being produced north of the Alps. To facilitate increasing exports of wheat, cattle, and cheese, as well as to provide better lines of communication for military purposes, roads connecting Rome and the northern outposts of the empire were extended and improved across the Mittelland. The pass routes—especially the Great Saint Bernard (Great Saint Bernard Pass) in the west, between Octodurum (Martigny) and Augusta Praetoria (Aosta), and the San Bernardino, Splügen, Septimer, and Julier passes that linked the upper Rhine valley with the south of Switzerland—were enlarged from trails to narrow paved roads. In the peaceful period from AD 101 to 260, few Roman troops remained in Switzerland, and the economy and culture blossomed under civil Roman administration; Romanization was particularly strong in the western and southern part of the region and in Raetia in the east. By the 4th century Christianity had started to spread among the inhabitants; the legend of the “Theban Legion”—martyrs allegedly executed near Saint-Maurice in the Valais—would leave its mark on the Christian identity in many Swiss towns.

      The first of the Germanic incursions occurred in AD 259–260 after the Roman limes (fortified strips of land that served as military barriers to invaders) fell. Although the Romans were able to temporarily reestablish the border at the Rhine, by AD 400 Roman Switzerland had disintegrated, and the lands of the Romanized Celts were occupied by Germanic tribes such as the Burgundians, Alemannians, and Langobardians (in Ticino). Few in number, the Burgundians occupied the lands of western Switzerland. They retained political control in Switzerland but lost contact with their former homelands and were assimilated into the Roman Celtic population. The French-speaking part of present-day Switzerland is approximately the territory settled by the Burgundians from the 5th century onward.

      Large-scale migrations of Alemannians (Alemanni) penetrated south of the Rhine during the 6th and 7th centuries. More numerous than the Burgundians and in direct contact with their kin north of the Rhine, the Alemannians colonized lands that had been only partially under Roman influence, which thus facilitated the imposition of their culture and language on the Celts. From the 6th to the 13th century, Germanic hegemony slowly penetrated westward from the Reuss River to the Sarine. The Alemannians also pushed farther into the upper Rhine valley, driving the Celts deeper into the Alps. Today in the valleys of the Graubünden (Grisons), the descendants of these Celts speak Romansh (Romansh language), the least-prevalent of Switzerland's four official languages.

      During the late 5th and early 6th centuries, Burgundians and Alemannians came under the control of the Franks (Frank) and thus became part of Charlemagne's resuscitated Holy Roman Empire in the 9th century. The Burgundians already were Roman Catholic, but the Franks let Irish and Scottish monks do missionary work among the Alemannians; the followers of one Irish monk, St. Gall (Gall, Saint), established a monastic settlement that became the town of Sankt Gallen. By erecting new churches and imposing their own counts and bishops, the Franks integrated the territory that later became Switzerland into the Carolingian (Carolingian dynasty) empire. But less than 30 years after Charlemagne's death, the Treaty of Verdun (Verdun, Treaty of) (843) divided his empire, including Switzerland, among his grandsons. The middle kingdom of Lothar I included the Burgundian settlement area west of the Aare River; it became part of an independent Burgundian kingdom that lasted until 1033, when it again joined the Holy Roman Empire. Alemannia, north and south of the Rhine, and Raetia were assigned in 843 to the East Frankish kingdom of Louis II (the German). By 1000 the Swiss territories belonged to 12 different bishoprics, the largest of which were Lausanne, Konstanz (Constance), Sion, and Chur.

Dynastic Switzerland
      The Swiss area became united again in the 11th century under the Holy Roman Empire with its German emperors; however, the remoteness and the gradual decline of the imperial power allowed the rise of quasi-independent territories out of bailiwicks. This process enabled the feudal dynasties of the Zähringen, Savoy (Savoy, House of), Kyburg, and Habsburg (Habsburg, House of) families to concentrate rudimentary administrative and judicial powers in their own hands by the beginning of the 13th century. In the High Middle Ages these families founded monasteries and new cities to provide secure stopping places for the increasing numbers of merchants participating in the rapidly expanding trade of western Europe. By 1300 some 200 towns existed in what would become Switzerland, but only a few of them acquired major significance. Many of the fortified places had several functions: providing a source of revenue, offering a centre for (juridical) administration, defending newly acquired territories, and serving as an outpost for further dynastic expansion. Conflict with the Savoys prompted the Zähringens to found strategically located towns such as Bern, sited on the easily defended great bend of the Aare River; Fribourg, located on a loop of the entrenched Sarine River where a key trade route crossed the river; and the walled city of Murten (Morat), which became the dynasty's western outlier. Under the Kyburgers, who were established in northeastern Switzerland, the settlements of Winterthur, Zug, Aarau, and Baden received town status. In the west the Savoys extended their domain from Geneva to Moudon and Yverdon, on the western end of Lake Neuchâtel, and up the Rhône valley into Valais.

      By the mid-13th century, the Zähringers and Kyburgers had died out, and, after driving the Savoys back to the Vaud, the Habsburgs emerged as the dominant family in Switzerland. Their original castle, built in 1020, was strategically situated within a few miles of the confluence of the Aare, Reuss, and Limmat rivers in order to control east-west routes across the Mittelland and north-south passages through the Saint Gotthard Pass, along with the waterways of Lakes Walen and Zürich. The expansion of Habsburg influence and territory, facilitated by the royal dignity of Rudolf I (1273–91), the first German king of the Habsburg dynasty, eventually led to a confrontation with some small, relatively autonomous communities within central Switzerland and ultimately to the establishment of the Swiss Confederation, which was the result of a clash between two contrasting models for establishing public peace (Landfriede): the territorial rule of the high nobility or a federation of rural and urban communes.

The Swiss Confederation during the Late Middle Ages
The foundation of the confederation
 The communities of Uri, Schwyz, and Unterwalden were populated by a large number of free peasants. Originally, secular or ecclesiastic lords had sent them to clear the woods and cultivate the land in the severe environmental conditions of the Alpine valleys. Problems relating to the use of pasturelands, overgrazing, the cutting of forests, and natural disasters such as landslides, floods, and avalanches were too complex for any one person or family to solve. Far away from their overlords, these peasants formed relatively independent communities (Talgenossenschaften), in which assemblies of all free men (Landsgemeinden) elected their own leaders (Landammann) from among the local oligarchy. Solemn oaths held these communities together, and stockbreeding procured considerable income. Their relative autonomy was strengthened by the Hohenstaufen (Hohenstaufen dynasty) kings and emperors, who privileged these rural communes and made them immediate subjects of the crown in order to keep free the roads between Swabia and Italy, especially the Saint Gotthard Pass, which was made accessible after 1200 by the construction of daring bridges. As contestants for the empire and rulers of the northern approach to Saint Gotthard, the house of Habsburg showed growing interest in the same area.

      In 1291, when Rudolf I of Habsburg died, the elites of the Waldstätte (Everlasting League) (“forest cantons”) Uri, Schwyz, and Unterwalden renewed an older treaty confirming that they would maintain public peace and efficient jurisdiction without interference from outside, thus securing their privileged position. Such pacts were common at that time, but this one was to be considered much later as the foundation of the Swiss Confederation (only since 1891 has August 1, 1291, been celebrated as the birth of the nation). The accounts of William Tell (Tell, William) and of the foundation of the confederation in the Rütli meadow by the shore of Lake Lucerne are legendary products as well, but they date from the late 15th century. Within the empire the three Waldstätte sided with the Habsburgs' rivals; Henry VII of Luxembourg confirmed direct imperial rule over the region in 1309, as later did Ludwig of Bavaria. In the Battle of Morgarten (Morgarten, Battle of) in 1315, the peasant foot soldiers of the forest cantons defeated an army of armoured Austrian knights sent against them in response to attacks on the wealthy monastery of Einsiedeln (near Lake Zürich). After the victory the league of 1291 was confirmed and extended; in matters of foreign relations, consultation among the members became compulsory.

      What would distinguish the Swiss Confederation from the many other leagues in Europe was the fact that it united equally entitled rural and urban communes, both of which had acquired autonomy from local seigneurs (bishops or bailiffs). The economic strength of the Swiss towns, whose merchants traveled to Venice, Cracovia (Kraków), Antwerp, Lyon, and other commercial centres, gradually eliminated the power and influence of the feudal nobility, such as the counts of Greyerz or Toggenburg, who depended on a rural economy that was particularly shaken by the crisis of the Late Middle Ages (pestilence, crop failures, and famine). Indeed, the standard of living of the nobles scarcely differed from that of their more affluent subjects, especially after the Black Death that plagued Europe after 1348—reducing the Swiss population by about one-fourth—enabled wealthier peasants to cultivate more land. During that period the towns bought land and seigneurial rights from indebted nobles and thus acquired territory of their own, where they subjugated the population in the manner of the feudal lords. By becoming burghers of the towns and often even residing there, the lower nobles found themselves officers of a more efficient urban administration that sought to use regular jurisdiction in replacement of feudal warfare and to guarantee safe and rational conditions for commercial expansion. For the same purpose, the Swiss towns successfully aimed for the privileges enjoyed by free imperial towns and united into leagues, such as Bern's Burgundian Confederation, or pursued special regional relationships, such as Zürich's orientation toward Swabia and Basel's focus on the Rhine region.

      The expansion of the Swiss Confederation followed the same logic, promising help against foreign and internal dangers. Sometimes joining the confederation was the result of discord within a town; for example, Zürich became a member of the alliance in 1351 after a revolution by the guilds against the pro-Habsburg nobility. In the resulting treaty, common arbitration was first established as a means to settle conflicts between the cantons. By 1332 Lucerne had entered the league; Zug and Glarus became allies in 1352 for the first time but permanent members only in 1365 and 1388, respectively. Although these cantons were direct neighbours of the forest cantons, Bern, which joined in 1353, was located in and oriented toward the west. The new members strengthened the confederation by providing additional revenues, labour, and political and strategic capacities. With decisive military victories at the Battles of Sempach (Sempach, Battle of) (1386) and Näfels (Näfels, Battle of) (1388), the confederation pushed back the Habsburgs' pretensions and further weakened the power and reputation of the local nobility dependent on them. About the same time, two joint concordats were concluded: the Pfaffenbrief (Priests' Charter) (Pastors' Ordinance, 1370), which protected passage along the Saint Gotthard Pass, prevented private feuds, and governed the relationship between secular and religious authorities, and the Sempacherbrief (Agreement of Sempach, 1393), which was to prevent private warfare by imposing common rules on all members of the league.

Expansion and position of power
      The expansion of the Swiss Confederation between the Battles of Sempach and Marignano (Marignano, Battle of) (1515) caught the attention of the European powers. The military strength of the confederation was founded on a militia of young people that was difficult to lead and often practiced blackmail or ravage but that stuck together in danger and developed a successful model for fighting knights with lances. Politically, non-Habsburg emperors—especially Sigismund (1368–1437), the king of Hungary, Germany, Bohemia, and Lombard and the Holy Roman emperor—granted privileges to the confederates, confirming their status as imperial towns and free communities. Thus, “turning Swiss” became an option for those German entities that disliked princely and usually Habsburgian territorial rule. Without becoming full members of the confederation, rural areas such as Appenzell (1411), republican towns such as Sankt Gallen (1454), Schaffhausen (1454), Mulhouse in Alsace (1466), and Rottweil in Swabia (1463), princes of the church such as the abbots of Sankt Gallen (1451), and the two other confederations of rural communities, the Valais and the Graubünden, eventually adopted the status of Swiss allies (Zugewandte). These allies took part in several wars and were invited to the meetings of the Diet (Tagsatzung), but, unlike the regular members, they neither possessed a full vote nor shared in the administration of the joint dependencies (gemeine Herrschaften). These dependencies were governed alternately by those cantons that had conquered them. As even the regular members were connected by many separate bilateral or multilateral treaties with different rules, Switzerland was really only a network of alliances rather than a state until 1798.

      Nevertheless, beginning in the 15th century, the confederation gradually became a power of order in the neighbouring area, even though it usually did not act as a whole, but only those cantons that were directly involved became politically active. Thus, it was mainly Schwyz that intervened in favour of Appenzell against the abbot of Sankt Gallen, while Uri followed its designs on territory south of the Alps. But, initially lacking the support of other cantons, it was prevented in the early 15th century from expanding into Italian-speaking Ticino by the viscount of Milan. In 1415, during the ecumenical Council of Constance (Constance, Council of), Sigismund invited the Swiss to weaken Frederick IV, the Habsburg supporter of an antipope, and conquer his ancestral territory, Aargau (Argovie), which had separated Zürich from Lucerne and Bern. Thus, Aargau became the confederation's first joint dependency. From 1424 (until 1712) the Diet became regular and assembled in the Argovian town of Baden to discuss common affairs and especially the administration of joint dependencies.

      Soon after, in the eastern part of present-day Switzerland, the ambitions of Zürich, which invited Austrian and French support, clashed with those of Schwyz, which found support with the other confederates. In the bitter Old Zürich War, which erupted in the late 1430s, Schwyz and its allies thwarted Zürich's attempt to gather a territory under the protection of its legitimate Austrian overlord and brought the city back into the internal balance of powers within Switzerland. Peace was finally restored in 1450, when Zürich renounced the Austrian alliance and Schwyz gained control of territory on the southern shore of Lake Zürich. While Zürich's expansionist aims thus were blocked in the south, it purchased suzerainty over the town of Winterthur in the east (1467). In 1460 Pope Pius II entitled the Swiss to conquer Thurgau, another Habsburg territory in the east, near Lake Constance, which as a result became a joint dependency.

      With the conquest of Thurgau and especially as a result of the Burgundian War (1474–77), Switzerland became a dynamic European power for half a century. Charles the Bold, duke of Burgundy, had tried to establish an empire extending from the Netherlands to the Mediterranean and gradually gained control of pawned Austrian territory from Alsace to the Rhine towns of Rheinfelden and Waldshut. Along the upper Rhine, Strasbourg, Basel, and Mulhouse sought support against Burgundian pressure and found it in Bern, whose commercial routes toward the west and north seemed endangered. Backed by an unprecedented peace and alliance with the Habsburgs and by the machinations of France's Louis XI, the confederates won a series of spectacular encounters, including those at Grandson, Murten, and Nancy (1476–77). Charles the Bold eventually was killed, which ended his attempt to resurrect the Lotharingian empire and benefited France and especially the Habsburg heritors of the Netherlands.

      The victory over Burgundy strengthened the position of the cities within the Swiss Confederation that wanted to welcome their wartime allies Fribourg and Solothurn into the league. The proposed expansion provoked a major crisis between the rural and urban oligarchies, which already had clashed over the Burgundian booty and generally had different interests. The towns were oriented toward commerce and interested in a more effective subjection of the countryside, which led to peasant uprisings such as those against Hans Waldmann (Waldmann, Hans), the burgomaster and virtual dictator of Zürich in the 1480s. The rural cantons sympathized with these peasants and also tolerated undisciplined freebooting; furthermore, these rather poor areas became even more dependent than the urban elites on the revenue generated by the increasingly professionalized mercenary system that supplied Switzerland's renowned troops to the princes of Europe. Owing to the mediation of the hermit Nicholas of Flüe (Nicholas of Flüe, Saint), the Diet of Stans (Stans, Diet of) (1481) agreement was reached, averting civil war by allowing Fribourg and Solothurn to join the Swiss Confederation, banning private war. The towns were required to renounce the separate alliance they had formed and to seek approval by the confederation for any future alliance that they might negotiate. This compact—the so-called Stanser Verkommnis (Contracts of Stans)—remained one of the very few treaties to include all of the cantons and was regularly renewed. Indeed, no common constitution existed prior to 1798.

      In 1495 Holy Roman Emperor Maximilian I and the imperial Diet of Worms imposed a public peace and a Reichskammergericht (Imperial Chamber of Justice), which served as the empire's supreme court. Like other peripheral regions, the Swiss Confederation opposed the intensification of the authority of the Habsburg ruler. Tensions also increased because of the antagonism between Swiss and Swabian mercenaries and a series of predatory excursions by both. The confederates were accused of being sacrilegious enemies of the nobility and true order. In 1499 Maximilian joined with the Swabian League, an alliance of southern German princes, knights, and cities organized to maintain public peace, and attacked the Swiss ally Graubünden, thus igniting the Swabian (or Swiss) War. After several battles in Graubünden and along the Rhine from Basel to the Vorarlberg, peace was declared at Basel on September 22, 1499; the Swiss Confederation did not adhere to the decisions of Worms, but it remained a subject of the empire even though there was little effective control left. Within two years the strategic Rhine territories of Basel and Schaffhausen joined the Swiss Confederation, and in 1513 Appenzell also became a full member.

      Following the Swabian conflict, Switzerland was drawn into the struggle between the Holy Roman emperor, France, Spain, and the Italian powers over control of the duchy of Milan. The Swiss had more than a passing interest in this area, having followed Uri and extended their control into the southern Alpine valleys while fighting against the Milanese during the 15th century. The elites of the cantons were divided according to their contrasting foreign sympathies and the bribes they received for selling mercenary troops. At first the Swiss supported France, but later they joined the alliance led by the pope to drive the French out of Italy. In September 1515 a disunited Swiss force was decisively defeated on the fields of Marignano (Marignano, Battle of) southeast of Milan, losing some 10,000 infantrymen in a battle against the French army, which used recently invented artillery and a modern cavalry.

      The terms of the peace settlement of 1516 with French King Francis I were generous to the vanquished Swiss Confederation, which kept most of present-day Ticino as a joint dependency, while the Valtellina was accorded to the Graubünden. The goodwill generated by the peace terms and the mercenary pact of 1521 resulted in more than 250 years of accord between the former belligerents and had important economic consequences for Switzerland, giving confederate merchants access to the large French market. Although the traditional trade with the empire and Italian states continued, France became, in keeping with the general shift of commerce toward the Atlantic countries, the main market for Swiss products (principally textiles and cheese and later books, jewelry, and watches) until the French Revolution.

      The defeat at Marignano marked the end of Switzerland's role as a European power and eventually—but not intentionally—led to a politics of neutrality. Its political structure as a federation of independent states no longer could match the efficiency and resources of the growing united monarchies. In particular, a common and active foreign policy became impossible as the Reformation added another dimension to the heterogeneity of the confederation, already split because of different regional interests and especially the opposition of rural and urban cantons. Nevertheless, the Swiss Confederation had shown more signs of institutional consolidation and cultural similarity in the 15th century than it would in the three following centuries. By 1500 it had established a historiographical tradition and a sense of itself as a political entity based on its shared topography and history; moreover, foreigners regarded it as an entity.

The ancien régime
      Switzerland's then biggest town, Basel, became a cultural centre as a result of the Council of Basel (Basel, Council of) (1431–49), the foundation of its university (1460), and its printing industry, which attracted famed Renaissance scholar Desiderius Erasmus (Erasmus, Desiderius), whose Christian philosophy became the heart of humanism in Switzerland. One of Erasmus's most eager pupils was Huldrych Zwingli (Zwingli, Huldrych), an influential theologian and a dynamic political leader whose new Protestant (Protestantism) religious doctrines, paralleling to some extent those of Martin Luther (Luther, Martin), fueled the Swiss Reformation. Against what he viewed as the decadent Roman Catholic hierarchy, Zwingli favoured the return to the teachings of the Bible. While Luther strictly separated the spiritual and political realms, Zwingli emphasized that both the church and the state were subject to the law of Christ. In 1525 Zürich's great council adopted his innovations: the Latin mass was replaced by a simple communion service; a German-language bible was introduced; the clergy were allowed to marry; the church's land property was secularized and its jurisdiction heavily restricted; and images were destroyed or withdrawn from the churches. Although supported by many peasants, the Swiss Reformation was most of all a success of the lay urban burghers and their councils, which took control of the spiritual and material power of the church and restrained the peasants, who in vain asked for the complete abolition of the tithe during the unrest of 1525. It was also in the countryside that the Anabaptists (believers of adult baptism) won most followers; refusing military service and the civic oath, they were cruelly suppressed well into the 18th century.

      Zürich's model was soon followed by other Swiss towns, especially those ruled by guilds such as Sankt Gallen, Basel, Biel, Mulhouse, and Schaffhausen and, after a public disputation in 1528, by patrician Bern. Yet, despite the presence of humanist supporters of the Reformation, the equally patrician towns of Fribourg, Solothurn, Lucerne, and Zug remained Roman Catholic. The most fervent opposition to the new faith came from central Switzerland's rural cantons, which already controlled the local Roman Catholic church and depended heavily on the mercenary system that Zwingli had severely criticized and that Zürich's council consequently had forbidden. In some rural areas with little central authority, the choice of religious denomination was left to individual communes, the majority of which adopted Protestantism. This occurred in both Glarus and Appenzell, the latter splitting along confessional lines into two half cantons in 1597. In Graubünden, too, the communes had free choice of adherence, and a majority chose Protestantism, while the Valais, after temporary success of the Reformers, was completely re-Catholicized later in the 17th century. Military confrontation over confessional preferences became inevitable within the joint dependencies, resulting in the Kappel Wars. In 1529 Protestant troops from Zürich and Bern advanced on the five Catholic cantons of central Switzerland (Uri, Schwyz, Unterwalden, Lucerne, and Zug), which had joined to form the Christian Union, but little fighting occurred in this first conflict, thanks to the compromise symbolized by the famous Kappeler Milchsuppe, a soup of milk and bread shared on the front by the two opposing armies. In the conflict's aftermath, Zwingli insisted on and used economic pressure to achieve the Reformation of the whole Swiss Confederation. The Second Kappel War (Kappel Wars) began in October 1531, when the five Roman Catholic cantons launched an unexpected attack on Zürich, winning the decisive Battle of Kappel, in which Zwingli, serving as chaplain for Zürich's forces, was killed.

      The second peace of Kappel confirmed the territorial status quo, which essentially remained unchanged until the demographic movements of the 19th century. The result was an irregular pattern of Protestant and Roman Catholic areas, cutting across the boundaries of language and physical geography, which is still in evidence today.

      In the western, French-speaking part of Switzerland, the Reformation coincided with Bern's expansion to the disadvantage of Savoy. In 1536 Protestant Bern conquered the Vaud and thus decisively backed the Reformation not only there but also in Neuchâtel and Geneva. Thanks to John Calvin (Calvin, John), the latter became the spiritual centre of Europe's Reformed churches while successfully resisting several attempts by Savoy to reduce the town under ducal power. A number of Reformation leaders in Switzerland (e.g., Calvin, Theodore Beza (Beza, Theodore), and Guillaume Farel (Farel, Guillaume)) were among the many Huguenot refugees from France; moreover, Italian and even Spanish Protestants also fled to Switzerland, heavily contributing to the economic and cultural development of the French-speaking Calvinist and German-speaking Zwinglian towns that united in two common confessions—the Consensus Tigurinus (1549) and the Second Helvetic Confession (1566). The Roman Catholic cantons responded by forming a special league, the Golden (or Borromean) League, in 1586 and establishing an alliance with Spain in 1586–87.

Confessional equilibrium
      At the national level, where there were almost no permanent common institutions other than the Diet, immobility was the result of the contrasting political and confessional options, which rendered impossible the accession of new cantons, though there was some interest from Geneva, Neuchâtel, and the Roman Catholic bishop of Basel. Yet, nobody dared to question the existing equilibrium, and for the same reason the cantons remained neutral during the Thirty Years' War, despite pressure from religious leaders; only the Graubünden was almost torn apart between France and Spain during the Valtellina troubles (1620–39), involving Spain, Austria, and France. During the 17th-century wars of French king Louis XIV, neutrality gradually developed as an official maxim of the Swiss Confederation, both as a result of an institutionally weak foreign policy and as a way to avoid the internal strife inherent in the different loyalties of the various cantons. Neutrality, which de facto favoured France, also corresponded to the confederation's new status as a sovereign republic after Basel's burgomaster, Johann Rudolf Wettstein (Wettstein, Johann Rudolf), obtained Switzerland's exemption from the Holy Roman Empire in the Peace of Westphalia (Westphalia, Peace of) of 1648.

      In the Diet, where every canton had an equal vote, and especially in most joint dependencies, which were governed by only the first eight members of the confederation, the Catholics had the majority despite a smaller population and comparatively less wealth. When Zürich and Bern attempted to gain supremacy in 1656, the five Roman Catholic cantons waged and won the first war of Villmergen in Aargau. In 1712, however, the same adversaries clashed in the second war of Villmergen, and this time the Protestants triumphed. Besides smaller changes in the joint dependencies, the confessional boundaries essentially were maintained, but the more economically prosperous Protestant towns now were also the incontestable political leaders in Switzerland.

      In contrast to the weak political and military structures of the confederation, since the 15th century the oligarchies, especially in the towns, had been strengthening their power within their cantons. They expanded their administrative power especially in the domains of jurisdiction, taxes, and military conscription. In the late 16th and 17th centuries, the cities gradually stopped admitting new burghers and restricted access to the councils and official duties to a small group of oligarchic families. A similar process produced poor peasants without juridical rights in the rural cantons. The growing number of regulations and taxes was particularly resented in the countryside, where people usually invoked old privileges. Sporadic unrest climaxed in 1653 in a large peasant revolt that united Catholic and Protestant peasants, especially in Lucerne, Bern, and Basel, but was violently suppressed. Toward the end of the 17th century, the councils gradually considered and represented themselves as absolute sovereigns. Judged from the outside by Aristotelian criteria, they could be described variously as aristocracies (e.g., patrician towns such as Bern), democracies (e.g., the rural cantons with assemblies of all men), or a mixture of both (e.g., the towns ruled by guilds such as Basel); yet everywhere power was in the hands of elites who oriented themselves along the lines of French court life. But the model of and the alliance with the Protestant states (especially the Netherlands and England) increasingly became an alternative about the turn of the 18th century. Under these circumstances, the Protestant principality of Neuchâtel was inherited in 1707 by the Prussian king Frederick I rather than by a French prince favoured by Louis XIV.

The emergence of a modern state
      In contrast to many surrounding regions, Switzerland experienced the 17th and 18th centuries as periods of peace and rising prosperity. Neutrality was beneficial to the economy, allowing the confederation to supply other countries with goods, and the influx of refugees, especially French Huguenots after their expulsion in 1685, was particularly important in rehabilitating old crafts and establishing new enterprises. By the 16th century French and Italian refugees had introduced watchmaking (watch) to Geneva, and by the late 18th century the city had some 1,000 master watchmakers and several thousand apprentices. Refugees were not instrumental in the founding of watchmaking in the canton of Neuchâtel, however; in the city itself, precision metallurgy was carried out as early as the 16th century, and specialists spread throughout the Jura, establishing this mountainous area as the major region of Swiss watchmaking.

      Having accumulated mainly from the pensions of the mercenary system and from commercial sources, Swiss capital was desperately needed in those countries that constantly were at war, especially in France, and Genevan bankers became the centre of an extensive European financial network. Thanks to such benefits and without the costs of a court or a standing army, several towns were able to abolish the taxing of subjects in the 18th century. Thus, there was plenty of capital available to finance industrial expansion. Topography and historical parceling precluded the possibility of investing in large agricultural estates. In addition, natural resources did not exist in sufficient quantities for easy exploitation, and the cultivation of land could not support the rising population. Consequently, the Swiss Confederation benefited from the ample supply of labour available. Because landlocked Switzerland had no shipping enterprises or colonial possessions, industry was the natural target for economic development. Thus, by the end of the 18th century, about one-fourth of Switzerland's working population was employed in industry, especially in the textile and watchmaking sectors. Owing to restrictions imposed by the guilds in the towns, this growth essentially occurred in the countryside; urban entrepreneurs provided raw materials to peasants, who were unable to subsist solely on their land and supplemented their incomes by spinning and weaving silk, linen, and especially cotton in their own cottages.

      Since its origin in the 14th century, the manufacture of wool cloth had always been among the most important Swiss industries, but, after the demographic and economic crisis following the Black Death, textiles (excluding Sankt Gallen's linen) did not blossom again until the 17th century, when refugees reestablished silk manufacture and later introduced fine spinning and muslin weaving. The free import of cheap machine-made thread from England sparked a last boom before the chaos of the French Revolution engulfed Switzerland, which was then among the most highly industrialized countries in Europe. The major producing regions were located in rural areas of the northeast, in proximity to Zürich–Winterthur and Sankt Gallen–Appenzell–Glarus, near sources of impounded water that provided mechanical energy for running the machines. In contrast, Bern and the Catholic cantons continued to rely primarily on agriculture. Rational commercial farming was introduced with some success, sometimes with the help of enlightened societies (such as those in Zürich and Bern).

      Despite the Swiss Confederation's economic expansion, its political institutions were poorly prepared to meet the forces set loose by the French Revolution: the 13 cantons had no central government; each had its own army; religious antagonisms persisted; the rural cantons were suspicious of the towns; the small cantons were jealous of the larger ones; the call for reforming the oligarchic and often corrupt hierarchies had been issued in several urban revolts during the 18th century, most frequently and intensely in Geneva, but was always violently repressed; and the more moderate propositions of the enlightened statesmen in the Helvetische Gesellschaft (Helvetic Society), a supraconfessional patriotic organization founded in 1761, met with similar refusal.

      Although both pro- and anti-French feelings existed, Switzerland attempted to remain neutral during the French revolutionary wars. The country's strategic position on the main Paris-Milan route via the Simplon Pass was vital for France, however, as was control of the Great Saint Bernard Pass. Thus, after Napoleon (Napoleon I)'s armies had conquered northern Italy, France invaded Switzerland and occupied Bern on March 5, 1798. Earlier the subjects in the Vaud and elsewhere had started to revolt against their urban lords, which thus revealed the impossibility of uniting the whole country against an often welcomed invader. Napoleon's occupation effectively ended the ancient confederation of the 13 cantons and their allies.

      Under French protection the Helvetic Republic, which lasted from 1798 to 1803, was established. For the first time in Swiss history, a constitution granted sovereignty to the people and provided individual rights and equality before the law; the subjects were liberated, and the Bernese and joint dependencies became cantons of their own. Although some former allies such as Sankt Gallen and the Graubünden joined the republic as full members, other cantons—Geneva, Neuchâtel, Valais, and the bishopric of Basel—were temporarily annexed by France. The unitary constitution, largely written by Peter Ochs (Ochs, Peter), Basel's chief master of the guilds, was modeled in Paris after the French constitution of 1795 and neglected the Swiss tradition of cantonal sovereignty. Opposition to the new state was strongest in central Switzerland, where Nidwalden's revolt ended with a massacre. But even the supporters of the Helvetic Republic soon split into factions and fought each other in several coups d'état. Furthermore, the French treated Switzerland as a vassal state, plundering it and making it a battlefield in their conflicts with Austrian and Russian enemies. By the time French troops withdrew in 1803, Switzerland was plagued by civil war and anarchy, which prompted Napoleon to intervene with the Mediation Act; this stabilized the country without sacrificing the recently acquired individual rights. The 13 cantons were reestablished as near-sovereign states, and 6 new ones were created with full rights: Sankt Gallen, the Graubünden, Aargau, Thurgau, Ticino, and Vaud. During the rest of the Napoleonic Wars, the Swiss were bound to France by a defensive alliance, and several thousand Swiss soldiers died during Napoleon's Russian campaign. Industry, especially textiles, suffered heavily from the continental blockade. In 1815, after Napoleon's fall at the Battle of Waterloo (Waterloo, Battle of), the Congress of Vienna (Vienna, Congress of) handed over the Valtellina from Graubünden to Austria, but it added the three ancient allies of Valais, Neuchâtel, and Geneva to the Swiss Confederation, bringing its total to 22 cantons. Thus, the hopes of Bern and the Catholic cantons to reestablish the former dependencies were not realized, though Bern received Jura, the ancient bishopric of Basel, as compensation. Through the Second Treaty of Paris (1815), the European powers recognized and guaranteed the perpetual neutrality of the confederation.

      Despite a major famine in 1816–17, a period of dramatic economic growth began after the Napoleonic Wars. There was a general improvement in agriculture, and tourism, especially from England, began to develop. But the industrial sector of the economy made the most significant gains, while still keeping its peasant character. The exclusion of the English from European markets by the wartime continental blockade, while initially detrimental to the textile industry, spurred the Swiss to modernize and to adopt mechanical spinning.

      The first mechanized spinning mill was set up in Sankt Gallen in 1801, and the first large-scale plant was established a year later in the canton of Zürich. The cotton industry gave birth to the machine-fabricating industry, and both soon started exporting. By 1810 one-fourth of the thread needed by the cotton industry was being supplied from domestic sources, and shortly thereafter Switzerland became wholly independent of foreign supply. Although craftsmen of the cottage industry resisted mechanization—sometimes violently—machine production was also introduced for weaving cloth.

      The pattern of Switzerland's future economic life was taking shape. Swiss industry had to export in order to grow. It was dependent on inexpensive labour and cheap raw materials, both of which the country lacked and needed to import. Free trade was therefore a necessity. The dangers of foreign protectionism were met by increasing specialization, scientific and technical progress, and more-intensive occupational training rather than by retaliatory tariffs. Swiss companies also began opening plants in other countries.

The liberal triumph
      On the political level the half century spanning from 1798 to 1848 can be considered a lasting crisis of transition. The Mediation Act had disappeared with Napoleon's demise, its place taken by the Federal Pact, which once again established Switzerland as a confederation of sovereign states united only for common defense and the maintenance of internal order. Thus, the formulation and execution of a united foreign policy was still impossible. In addition, the Swiss were separated by legal barriers—each canton had its own laws, currency, postal service, system of weights and measures, and army. The right to reside freely in any canton had also ended along with the Mediation Act, and the inhabitants of each canton therefore regarded those of the other cantons as nationals of different countries. Furthermore, civil liberties were almost nonexistent, and religious differences reappeared, as the Roman Catholic hierarchy abandoned some of its earlier positions and sided firmly with reactionary antimodernism.

      But the July Revolution of 1830 (1830, Revolutions of) in Paris inspired the so-called “Regeneration” reform movements, which organized popular assemblies in the industrialized countryside, even as the cantonal capitals, along with their guilds and patricians, remained conservative. Petitions for liberal constitutions were signed, and in most cantons the patricians renounced power in favour of popular sovereignty and equality for the rural population. Yet, Basel and—for a short time—Schwyz were split into two half cantons because their elites tried to withhold these rights from the entire population, even at the price of civil war. Thus, a group of strong liberal cantons, led by Bern, Zürich, and Lucerne, opposed an alliance of conservative cantons that included the Catholic forest cantons, along with Protestant Basel and Neuchâtel. On a national level, this polarization made it impossible to replace the Federal Pact of 1815 with a liberal constitution drawn up in 1832.

      Both conservative and liberal legal and revolutionary changes occurred in the cantons during the 1830s. When the radical wing of the liberals suppressed convents in Aargau in 1841, Lucerne turned conservative and invited the Jesuits to its schools. The radicals responded by launching two unsuccessful guerrilla attacks against Lucerne. Thus, the political conflict was infused with confessionalism, and in 1845 the Catholic cantons formed the separatist defensive league known as the Sonderbund, comprising Lucerne, Uri, Schwyz, Unterwalden, Zug, Fribourg, and Valais. Still, two other Catholic cantons, Solothurn and Ticino, along with several religiously mixed ones, sided with the majority and thus proved that the conflict was essentially political and not religious. In July 1847 the Diet, representing the majority of liberal cantons, declared the Sonderbund to be incompatible with the Federal Pact and demanded its dissolution. A 25-day civil war erupted, and the result was a complete victory for the forces of the confederation. Owing to the military superiority and moderation of the majority and their commander in chief, General Guillaume-Henri Dufour (Dufour, Guillaume-Henri), few lives were lost. Nevertheless, the vanquished bitterly resented their humiliation, and, on a national level, political Catholicism retired into an oppositional “ghetto” until the end of the century. It was protected by the sovereignty of the conservative cantons, where Roman Catholics remained in power and fervently defended local autonomy and ecclesiastical rights against liberal-radical nationalism and centralism.

      Immediately after their victory and while the suspicious conservative regimes in the neighbouring countries were embroiled in domestic revolutions, the Swiss liberals established the new federal constitution of 1848, the essential structure of which has remained unchanged. The constitution provided considerable national representation even for the small cantons, which maintained essential sovereign rights (taxation, jurisdiction, and education). It created a bicameral legislative system, modeled after that of the United States, which combined a council of cantons (Ständerat), with each canton entitled to two members, and the National Council (Nationalrat), whose members would be elected in equal proportion to the Swiss population. The constitution also established the Federal Council (Bundesrat), an executive consisting of seven equally entitled secretaries. A common foreign policy was finally possible, and the new federal state unified customs, currency, weights and measures, and the postal service. It also provided for the promotion of the national welfare and for the protection of civil rights and liberties—though these were not granted to Jews until 1866. Finally, in one of the parliament's first decisions, Bern was chosen for the capital of the new country over Zürich, Switzerland's largest city.

Switzerland from 1848 to the present
      The year 1848 was a decisive turning point in Swiss history. Although internal conflict was not wholly eliminated thereafter, it was always settled within the framework of the 1848 federal constitution. The liberals and radicals, who completely dominated the state in the 19th century and remained a leading force into the 21st century, gradually and not always willingly integrated other political and social groups into the government: first the conservative Catholics, then the peasants' party, and finally, during World War II, the socialists. Enjoying internal political stability and spared from war—phenomena unmatched elsewhere in Europe—the Swiss focused much of their attention and efforts on developing industry, agriculture, communications, and the financial sector.

Economic expansion
      The unification of Switzerland's economy was aided by the development of a rail (railroad) network that rapidly expanded as soon as the new constitution had been approved. In 1847 the first railroad opened between Zürich and Baden. Because of the influence of the “railway barons,” the most prominent of whom was Alfred Escher (Escher, Alfred) from Zürich, the railways were built through competition between private entrepreneurs rather than in accordance with some central plan. The result was an extensive network of small and medium-sized lines that were barely coordinated but covered more than 600 miles (1,000 km) of track by 1860 and twice that amount by 1876. The Swiss eventually voted in 1898 to nationalize the main lines, and in 1902 the Swiss Federal Railways (Schweizerische Bundesbahnen) was formed.

      To compete with the opening of the trans-Alpine Mount Cenis (Mount Cenis Tunnel) and Brenner Pass rail links, the Swiss negotiated construction of the Saint Gotthard Tunnel with Italian and German interests. After 10 years of excavation, marked by labour unrest and the death of some 167 workers, the 9.3-mile (15-km) tunnel—then the world's longest—opened in 1882. Thus, the cantons of Uri and Ticino were connected by rail, and a direct line was inaugurated between Zürich and Milan. In the early years of the 20th century, the 12-mile (20-km) Simplon Tunnel and the 9-mile (14.5-km) Lötschberg Tunnel linking Bern to Brig were also opened to rail traffic.

      To finance railway construction, Escher in 1856 founded one of Switzerland's largest and most successful banks, the Kreditanstalt (now Credit Suisse). Six other large commercial banks were also established in the 1850s. Because these banks were mainly interested in large investments, reformers stimulated the creation of cantonal banks to provide credit for the general public. In other areas of economic, internal, and foreign politics too, the radical-democratic middle class opposed the liberal economic elites, whose interaction of industrial, financial, and political power tinged with nepotism was characteristic of the bourgeois capitalism of Escher's time.

      Another effect of the quick development of rail (and maritime) transportation was the growing importation of cheap cereals, which plunged Swiss agriculture into crisis. In 1850 more than half the grain consumed was produced domestically, but by 1914 that measure stood at about one-fifth; in the same period, the number of Swiss employed in agriculture dropped from more than half to one-fourth. In the economic depression of the 1870s, the textile industry also lost its predominant position, while other export industries (e.g., chemicals and machine building) profited from the expanding means of communication.

Internal challenge
      In 1856–57 the young republic clashed with Prussia over Neuchâtel, and war seemed inevitable; but ultimately, the Prussian emperor renounced his hereditary rights to the former principality. Yet, despite some smaller incidents (such as the conflict over the territories of Savoy with Napoleon III in 1860 as well as a clash with German chancellor Otto von Bismarck in 1889), Switzerland's foreign relations were relatively smooth in the second half of the 19th century. Even radical politicians started to regard armed but cautious neutrality as the appropriate role for a small country bounded by bellicose and increasingly stronger monarchies. This neutrality was maintained during the Franco-German War (1870–71), in which the problems of interning a French army on Swiss soil eventually led to military reforms along the Prussian model without abolishing the principle of a militia army.

      Domestic challenges rather than foreign ones were typical during this period. Economic development caused a malaise among different social groups; for example, labourers suffered from difficult working conditions, and the precapitalist elites, rural masses, and urban craftsmen all were losing their traditional sources of income. Although they had different needs and goals, they all sought greater popular participation in government. This democratic movement was particularly strong in Zürich, where in 1869 it was able to impose direct elections of the government and popular referendum for all parliamentary bills. After similar success in other cantons, the reform movement passed at the national level the Factory Act of 1877, which heavily involved the federal government in social welfare for the first time. In 1874 an alliance of the new democratic party and the dominant radical-liberal groups secured passage of a revised federal constitution. The 1874 constitution introduced a substantial innovation: direct democracy became possible through referendum and was reinforced in 1891 through initiative, the right for citizens to place an issue before the public if they were able to secure enough signatures.

      The new constitution also strengthened federal power over the army and in the areas of social and economic legislation and justice. Such centralist measures met with the opposition of not only the conservative cantons but also the francophone minority; together they managed to defeat a first draft for an amended constitution in 1872. The referendum over the 1874 constitution was won only against the backdrop of the Kulturkampf (German: “cultural struggle”), a Protestant-led movement to limit the influence of the Roman Catholic Church, which was further constrained by new constitutional articles. While the Protestant French-speaking cantons now voted for the changed constitution, the Catholic minority had responded to its defeat by systematically and successfully using the referendum weapon in the name of cantonal rights against any bill that could be deemed a unitarian measure. To avoid such obstruction and to give the bourgeois position more weight against the growing socialist movement, the dominant bloc of liberals, radicals, and democrats approached the conservatives, and in 1891 the first member of the Catholic conservative party joined the Federal Council. In the same year the confederation for the first time celebrated the 1291 treaty as the country's founding, symbolizing the reconciliation of the former opponents who had fought against each other in the Sonderbund War in 1847.

World War I and economic crisis
      Switzerland maintained its neutrality in World War I, but the conflict not only engendered heavy tensions between the Germanophone Swiss and their French- and Italian-speaking countrymen—the result of each group's cultural identification with the combatants—but also cast a weighty burden on the working class. As part of the militia army, they were mobilized for long periods to guard Switzerland's borders, but they received no compensation for their loss of wages. Moreover, the working class was also hurt by the government's decision to finance defense efforts through the issue of currency, which caused a surge in inflation. Some Swiss did profit from the war, as the country's persistent balance-of-payments deficit was reversed for the first time. In particular, the metallurgical, chemical, timber, and watchmaking industries furnished goods to both belligerent camps, while farmers benefited from increasing demand and prices.

      Social tensions erupted at the end of the war. In November 1918 there was a national strike, which originated in Zürich. The federal government, fearing a Soviet-style Bolshevik revolution, mobilized a large number of loyal troops, especially from the countryside. Within three days the strike leaders, many of whom were arrested, capitulated without a fight. Because the strike coincided with a worldwide influenza epidemic that cost many lives among those who had been mobilized, bitter feelings against the working class lasted for generations, especially among the farmers. Nevertheless, some of the strikers' claims were soon realized (e.g., the 48-hour workweek and improved benefits for the unemployed). Particularly important was a reform of the voting system; with the replacement of majoritarian voting by proportional representation in 1919, the liberals immediately lost the dominant parliamentary position that they had enjoyed since 1848. In short order a second conservative joined the Federal Council, and in 1929 a member of the peasants' party was elected. Since the end of the 19th century, the Farmers' Association, representing a clientele particularly struck by structural crisis and in favour of protectionism, already had been the most successful of the different lobbying groups that increasingly influenced federal politics.

      The worldwide economic crisis (Great Depression) after 1929 dramatically reduced Swiss exports. Many banks became insolvent, while the machine-building industry was resilient, particularly because in this time the Swiss railway lines were largely electrified and needed new machines. The domestic crisis peaked in 1936 when many workers—especially in the construction industry—were dismissed, and the national bank was forced to devalue the Swiss franc by 30 percent. The following year there was a breakthrough in the relationship between the metallurgical employers and the trade unions, both of which agreed to find compromises without violent confrontation. This agreement served as a model for other industries and henceforth ensured a high degree of social peace.

      This economic rapprochement, which had political parallels, occurred against the backdrop of the growing danger of National Socialism in Germany. Its imitators in Switzerland, the so-called Fronten (“fronts”), were loud but weak: in 1935, at their peak, they had only one representative in a national parliament of 187. Like the communists on the left, they were considered a fifth column, the agents of a foreign power. After some time the Social Democrats—who had largely been pacifists since World War I or antimilitary since the troops' intervention in the general strike—joined the bourgeois parties in 1935 to authorize the arming of a comparatively outdated army. After World War I Switzerland had joined the Geneva-based League of Nations (Nations, League of), which accorded it the special status of “differentiated neutrality,” excluding Switzerland from participation in collective military measures. As the fascist countries became increasingly aggressive and the Western powers barely reacted, the federal government looked for good foreign relations with its totalitarian neighbours; indeed, Switzerland was among the first countries to recognize Italy's conquest of Ethiopia under Benito Mussolini (Mussolini, Benito) and the Spanish regime of Francisco Franco. After the political union ( Anschluss) of Austria by Germany in 1938, Switzerland returned to absolute neutrality, as the system of collective security revealed itself to be incapable of protecting minor states.

World War II and the Cold War
      When World War II broke out, Switzerland mobilized 450,000 soldiers and 200,000 auxiliaries (it eventually mobilized 850,000 people out of a total population of 4,000,000). Having learned from World War I, the government provided compensation to workers for lost wages, and, despite economic difficulties, it was able to keep inflation at a tolerable level throughout the war. Another difference from World War I was the unity evident throughout Switzerland, irrespective of class and language. Symbolic of this singularity of purpose was the election of the first Social Democrat to the Federal Council in 1943. The most difficult phase of the war was in the summer of 1940, when France had unexpectedly fallen and Switzerland was surrounded by the Axis powers. The only open tunnel to Vichy France closed in late 1942 when Germany occupied the southern part of France. When most Swiss feared that they would become the next victim of Nazi expansionism, federal councillor Marcel Pilet-Golaz gave a speech on June 25, 1940, that generally was interpreted as an adaptation to the new Europe controlled by Germany. Many Swiss refused accommodation, and, in a speech given the following month to the army's highest officers at the symbolic Rütli plateau, the commander in chief of the Swiss army, General Henri Guisan (Guisan, Henri), expressed a lasting spirit of military resistance; in addition, a fortress in the central Alps, the réduit, was equipped with ammunition, medical supplies, food, water, hydroelectric plants, and factories to enable the Swiss army to fight the Nazis even if the cities of the Mittelland were captured.

      In the days following Guisan's speech, Switzerland signed the first of several toughly negotiated commercial treaties with Germany. The Germans supplied raw materials (coal, iron, and seeds for a country that produced only 60 percent of the food it needed) in exchange for considerable Swiss financial credits and military and strategic material produced by private companies, including aluminum, machine tools, and watches. Weapons (e.g., antiaircraft defense) made up a significant share of Switzerland's exports to Germany; though they constituted less than 1 percent of Germany's own armaments, these supplies may have been important at specific moments of the war. It was the national bank, however, that rendered the most problematic service to Germany, buying gold looted from western European central banks, including small quantities of victims' gold from concentration camps. Although historical evidence suggests that the Swiss did not know the origins of this gold, by at least early 1943 the Swiss national bank was aware of the German looting of central banks yet continued to buy the melted and reformed gold in large quantities until 1944 and in lesser amounts even until the last weeks of the war. The total amount the Swiss national bank paid to Germany for mostly looted gold was 1.2 billion Swiss francs; Germany used this money—its only remaining convertible currency—to purchase missing raw materials from abroad.

      Transit through the Alps benefited the Axis but generally conformed to international law, which allows shipments other than those of weapons or troops; by far the most important shipment was of coal. Despite its geographic location, Switzerland also maintained economic relations with the Western Allies during the war; for example, it bought a considerable amount of (nonlooted) gold from the United States and Britain. The Allies then used Swiss francs to pay for intelligence services in Switzerland and for the good offices the neutral country could provide through the Red Cross for prisoners of war. Humanitarian policy, however, was the saddest—yet most ambivalent—chapter of Switzerland's war history. To a large extent, the alleged humanitarian tradition of a neutral minor state was given over to the initiative of private persons and charitable organizations. The government itself declared a restrictive immigration policy, admitting refugees (refugee) essentially for transit into a third country but without pursuing this policy consistently. There were several reasons for the harsh policy against refugees; one was the fear that immigration might provoke social unrest, especially given the country's weak labour market after the economic crises. Officials further adduced the economic costs of accommodation—the lack of food and impediments for national defense—but anti-Semitism and the fear that the country might lose its character as a result of Überfremdung (“overforeignization”) also were decisive factors. During the war Switzerland accepted nearly 300,000 refugees—one-third of whom were military internees, while many others, especially children, arrived only for a short period or, especially from the neighbouring areas, only in the last weeks of the war. Among the roughly 55,000 civilian refugees, about 20,000 were Jews, who were denied asylum because they were not considered “political refugees.” During the war, especially in 1942–43, when the Swiss border was officially but not hermetically sealed, at least another 20,000 civilian refugees, most of them Jewish, were turned away. It is probably impossible to establish the precise number of those who were killed in concentration camps after a vain attempt to flee to Switzerland.

      Judging Switzerland's role during the war is complex. Switzerland appeased the Axis, but it also was ready to defend its independence in the event of a German attack. Moreover, there were many examples of compassion toward refugees and other victims of the war, and the Swiss had to balance the interest of other countries and peoples with its attempt to ensure its own national survival. While some profited from trade with the Axis, the Swiss in general rejected those regimes and their racist ideology, considering these a mortal danger for their democracy and diverse linguistic and religious population.

The postwar period
      At the end of the war, Swiss politics and neutrality were internationally compromised because Switzerland had maintained relations with Nazi Germany until its demise. The Soviet Union only reluctantly accorded diplomatic recognition to Switzerland, which had been a herald of anticommunism in the interwar period. In a 1946 agreement the Western Allies, especially the United States, compelled Switzerland to compensate the looted western European central banks, requiring the payment of some 250 million Swiss francs. Because Switzerland would have received no special recognition of its neutrality, the Federal Council decided not to join the United Nations (UN), which nonetheless occupied offices in Geneva. Joining the North Atlantic Treaty Organization (NATO), the U.S.-led Western alliance, was never a serious option for a country that believed armed neutrality had been the best defense against Nazism and would also save the country from communism. The Cold War allowed Switzerland to again become a respectable member of the international community. Neutrality enabled it to play a mediating role between the two antagonistic camps, but, as a capitalist democracy with a strong citizens' army, it was a tacit member of the noncommunist world and one of its key defenders. An interesting and complicated mixture of neutrality, isolationism, solidarity, anticommunism, and militarism became the common, often complacent ideology of most Swiss, be they bourgeois or socialist.

      In 1959 the so-called Zauberformel (“magic formula”) for the Federal Council was established, under which it was composed of two liberals, two conservatives, two Social Democrats, and one member of the peasant-based Swiss People's Party. This formula, which persisted until 2003, permitted the government to sidestep party rivalries to distribute Switzerland's growing wealth and build a strong social welfare state. For a long period after World War II, the undamaged Swiss economy experienced very little unemployment, and it grew approximately 5 percent per year in the 1950s and '60s. During this period, foreign policy was virtually reduced to negotiating bilateral trade agreements. Because Switzerland avoided multilateral ties that could affect its sovereignty, it resisted European integration efforts. Thus, it did not join the European Economic Community (now the European Community, part of the European Union [EU]); instead it was a founding member of the European Free Trade Association (EFTA) in 1960. Switzerland's economic growth rapidly changed the landscape and the living standard, helping to perpetuate the image of the country as a special case (Sonderfall). It renounced bilateralism only slowly and gradually within “apolitical” international bodies, including the General Agreement on Tariffs and Trade (1966), the International Monetary Fund and World Bank (1992), and the World Trade Organization (1995).

      Switzerland's strong economy attracted many immigrants, first from Italy and Spain and after 1980 from Yugoslavia and Turkey. Xenophobic political parties began to attract significant support about 1970, though initiatives to reduce the number of foreign labourers were narrowly defeated. Nonetheless, during the 1970s many foreign workers, particularly those in construction and watchmaking, were forced to leave as a result of sector restructuring and rationalization. By 2000, however, foreign citizens constituted nearly one-fifth of Switzerland's population. (This high proportion resulted in large measure from the legal and political difficulties involved in naturalization.)

      Switzerland also has kept a conservative approach to several other issues. For example, women (woman suffrage) were enfranchised on the national level only in 1971, and in the canton of Appenzell they had to wait until 1990 for full voting rights. Relatively late, in 1981, an equal rights amendment was added to the constitution, and in 1985 the rather patriarchal marriage law was amended. Another problem that had lasted for decades was resolved pragmatically in 1978, when a national referendum authorized Jura, a French-speaking Catholic area of the Protestant canton of Bern, to form its own canton.

      The 1968 student revolt common throughout the West left its traces in the country, but the bourgeois majority furiously rejected its Marxist ideas. However, changes in lifestyles, gender relations, and the popular culture did not spare the Helvetic island, and the successful opposition against an atomic power station near Basel was one trigger of a strong environmental movement. A youth rebellion, originating in 1980 in Zürich, caught international interest, as did “Needle Park,” a temporarily free market for drugs, years later.

Recent developments
      In the 1990s Switzerland was one of the world's wealthiest and most prosperous countries, and neutrality, still the country's official doctrine, became much more complicated. In 1986 some three-fourths of voters rejected entry into the UN (United Nations), despite the endorsement of membership by most mainstream politicians. Though opposed to joining the association, Switzerland sided with the UN against Iraq's invasion of Kuwait during the Persian Gulf War (1990–91). In a later referendum, in 2002, a very slight majority approved entry into the UN. Yet, the changed proportions show that decisive and seemingly contradictory changes occurred in a few years. In 1989, for example, some one-third of voters endorsed a referendum proposing the abolition of the Swiss army, which had been considered the untouchable backbone of Swiss sovereignty. On the other hand, in 1992 Swiss voters narrowly turned down membership in a European Economic Area that comprised the EU (European Union) and EFTA. Because most EFTA members had joined the EU, Switzerland was politically isolated within Europe at the beginning of the 21st century. However, it maintained strong bilateral economic ties with the EU, which was by far its largest trading partner. In 2008 Switzerland acceded to the Schengen Agreement, a European convention aimed at reducing international border controls between member countries. While there was significant popular opposition to joining the Schengen area, proponents cited the benefits of decreased congestion at border checkpoints and access to the Schengen Information System (SIS), a database containing information about persons and goods traversing the Schengen zone.

      At the end of the 20th century, growing doubts about Switzerland's past and future emerged. Many Swiss questioned the country's traditional “bunker mentality” in a Europe at peace and with open borders. Particularly troubling for Switzerland was an international debate during the 1990s about “dormant accounts”—assets left by Jews in Swiss banks during the Nazi era but never returned—a controversy that challenged Switzerland's image of itself and resulted in a settlement between two large commercial banks and Jewish plaintiffs in which the banks agreed to pay international Jewish organizations 2 billion Swiss francs.

      As a result of such debates and structural changes, the political arena has become much more polarized between advocates and opponents of a quick integration into supranational structures, especially the EU. After years of spectacular growth, the Swiss People's Party, which since the 1990s had adopted policies that were perceived as antiforeigner and anti-European, became the largest party in the Federal Assembly following the federal elections in 2003 and subsequently was awarded an additional seat on the Federal Council, signaling a significant alteration in the balance of political power. In 2007 the Swiss People's Party became the first opposition party in nearly 50 years when it withdrew from the country's long-standing governing coalition. The departure of the far-right party shifted the government toward the political centre. In December 2008, however, the legislature chose Ueli Maurer of the Swiss People's Party to replace an outgoing member of the Federal Council, thereby returning the far right to the country's traditional coalition government.

      Switzerland, which has had one of the most successful national histories in Europe, faces unique problems in a time of peace and prosperity. Its archaic aspects—such as the autonomous communes that form the basis of Swiss citizenship—reflect political continuities that have endured despite often dramatic social change. For a long time the Swiss have attributed their good fortune to their own virtues, especially democracy, federalism, political moderation and stability, neutrality, humanitarianism, valour, and diligence. However, Swiss exceptionalism appears more and more questionable. Moreover, the controversies over Switzerland's historical role have challenged its self-image as an island of virtue. Yet, for a people of diverse cultures and languages, political uniqueness has largely constituted national identity. Can this country based on a sense of otherness survive in its present form, or will its different linguistic regions join their big neighbours on linguistic grounds if Switzerland should further renounce its sovereignty and join the EU?

Aubrey Diem Thomas Maissen

Additional Reading

General works
Overviews of all aspects of Swiss life include Emil Egli, Switzerland: A Survey of Its Land and People, trans. from German (1978), which provides a description of landscape, climate, settlement patterns, and economy; Aubrey Diem, Switzerland: Land, People, Economy, 4th rev. ed. (1994), a concise text including history as well as an analysis of the major cities and regions; Christopher Hughes, Switzerland (1975), a critical account; and Jonathan Steinberg, Why Switzerland?, 2nd ed. (1996), an assessment of Swiss behaviour and culture.Other broad treatments of note include J. Murray Luck (ed.), Modern Switzerland (1978); Swiss Office for the Development of Trade, Focus on Switzerland, 2nd ed., rev. and enlarged, 4 vol. (1982), a comprehensive, beautifully illustrated work that examines the country's landscape, history, institutions, cultural life, and economy; and Eduard Imhof (ed.), Atlas der Schweiz (1965–2000), a comprehensive series of large-format detailed maps with text, relating to all aspects of the country. The environment is the subject of Organization for Economic Co-operation and Development, Environmental Performance Reviews: Switzerland (1998).Specific attention to the political culture of Switzerland is given in Kenneth D. McRae, Switzerland (1983), vol. 1 of Conflict and Compromise in Multilingual Societies; and Carol L. Schmid, Conflict and Consensus in Switzerland (1981), which offers historical insight into the reasons relative social and political stability exists in Switzerland. John R.G. Jenkins, Jura Separatism in Switzerland (1986), recounts the events leading up to the formation of the new canton of Jura.

Swiss National Tourist Office, Switzerland and Her Glaciers: From the Ice Age to the Present (1981), gives a vivid portrayal, with detailed text and excellent colour photographs. Max Iklé, Switzerland: An International Banking and Finance Center (1972; originally published in German, 1970), chronicles the history of the country's financial institutions. A useful resource in German is Andre Odermatt and Daniel Wachter, Schweiz: eine moderne Geographie, 4th ed. (2004).

A broad overview of Swiss history in German is found in Ulrich Im Hof and Beatrix Mesmer, Geschichte der Schweiz und der Schweizer, 3 vol. (1982–83). Historical introductions in English include Edgar Bonjour, H.S. Offler, and G.R. Potter, A Short History of Switzerland (1952, reprinted 1985); Edgar Bonjour, Swiss Neutrality: Its History and Meaning, 2nd ed., trans. from German (1952); William Martin, Switzerland: From Roman Times to the Present, 6th ed. (1971; originally published in French, 1966); Frederick William Dame, History of Switzerland, 3 vol. (2001); Dieter Fahrni, An Outline History of Switzerland, 8th ed. (2003); and Roger Sablonier, “The Swiss Confederation,” in Christopher Allmand (ed.), The New Cambridge Medieval History, vol. 7 (1998), pp. 645–670, which focuses on the Middle Ages. The debates about Switzerland's war history have produced a variety of literature, both apologetic and polemic. A biased assessment is Georg Kreis, Switzerland in the Second World War (1999). Hektor Ammann and Karl Schib (eds.), Historischen Atlas der Schweiz, 2nd ed. (1958), is an excellent atlas of Swiss history.Aubrey Diem Thomas Maissen

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Universalium. 2010.

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