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From: wolda002@umn.edu
Date: Wed Feb 17 2010 - 22:46:08 EST
The End of Switzerland
The economic crisis and rising xenophobia are breaking down the great Swiss
myths and undoing this once unique model nation.
By Denis MacShane | NEWSWEEK
Published Feb 5, 2010
>From the magazine issue dated Feb 15, 2010
In the third man, Orson Welles famously mocks Switzerland by saying, "Five
hundred years of democracy and peace, and what did that produce? The cuckoo
clock." This was never quite true. While 20th-century Switzerland often
displayed a clocklike efficiency, with a skilled workforce and an enviable
road-rail network, it also represented something more profound. Its unique
blend of nationalities, languages, and religions, of farmers, bankers, and
engineers, showed how forces that tore other nations apart could be formed
into a relatively harmonious whole. The World Economic Forum does not hold
its big annual meeting (which convened late last month) in Davos by
accident. For the evangelists of globalization, Switzerland has long been
the model nation.
The country appeared to combine deregulated low-tax economics with robust
rule-of-law democracy. It was the first refuge for those fleeing communism
after 1917 or Nazism after 1933—just as it offered safe haven to
Voltaire, James Joyce, and Lenin. Openness made Geneva a world capital,
with the League of Nations, the International Red Cross, and then key U.N.
agencies all settling there. The Alpine nation was an island of freedom
during World War II. Churchill went to Zurich to appeal for European unity
after 1945. Diplomats signed peace treaties in Switzerland in the 1950s and
1960s. The country sold itself as neutral, free of Cold War alignments and
the snares of the European Union. Reagan and Gorbachev met there to begin
ending the Cold War. Switzerland was where the world came to find
solutions.
Today, however, Switzerland's cities are grubby, its trains run late, its
highways are always under repair, and its politicians often seem
provincial. This former haven has turned ugly, as xenophobic populists have
campaigned to close doors to outsiders (except the super-rich). More and
more, Switzerland seems like just another small, struggling European
nation. As Europe ponders its role in the new geopolitical order,
Switzerland is looking less and less important to world affairs. The Swiss
like to define themselves as a Willensnation—literally, a nation formed
by the people's will. But the will to reinvent Switzerland now seems
lacking.
In the meantime, the Swiss people's self-satisfied myths are rapidly
evaporating. Take banking secrecy. The tradition began in the 1930s, when
the Swiss sheltered French capital fleeing left-wing governments and then
Jewish money escaping the Nazis. The trick was to make it a crime to reveal
any details of a Swiss bank's dealings—even to the Swiss tax man. The
country quickly became famous for its no-questions-asked depositories.
These are now a thing of the past. A decade ago, the Swiss were forced to
disgorge unclaimed Jewish money banked in the Nazi era by depositors who
had subsequently perished. Then the United States, chasing tax evaders,
threatened to cut off Swiss banks from the lucrative U.S. market if they
didn't reveal details on hidden American money. Washington also forced the
Swiss to pay mammoth fines for allegedly breaking U.S. sanctions on Iran.
Switzerland has now agreed to tax the savings of EU citizens holding Swiss
accounts, and disgruntled bank employees have sold details of offshore
deposits to German tax au-thorities. Even Italy, hardly a model of fiscal
probity, has managed to use a tax amnesty to persuade its rich scofflaws to
bring billions of euros back home from Switzerland. Swiss banks may still
attract plenty of money, but they can no longer guarantee secrecy.
Switzerland's exemplary integration and tolerance are also slipping. Today
the Swiss French hardly bother learning German, and Swiss Germans have
stopped learning French. The most common second language is now English,
not one of the country's four official tongues. The Swiss are also losing
patience with outsiders. During the 1990s, the country took in more
Kosovars fleeing Slobodan Milosevic's barbarism than any other European
nation. Yet last November it passed a vicious-ly xenophobic referendum,
amending the Constitution to forbid the construction of minarets. Never
mind the fact that Swiss Muslims are unusually well integrated, coming
mainly from secular Balkan communities.
This pattern—welcoming refugees and then reacting nastily against
them—is actually part of a longstanding Swiss paradox. Before 1939, the
country took in German Jews while Britain shut its doors. Yet it was also
responsible for getting the Nazis to stamp the notorious J (for Jude, or
Jew) on the front of German passports, in order to make it easier for Swiss
frontier guards to see who was trying to get into their country. According
to a recent book by Uri Gredig, a Swiss TV journalist, before Davos became
synonymous with globalization it had a very different distinction: in the
1930s it was home to the biggest Nazi Party branch outside Germany.
Still another myth, much touted at home and by Euro-skeptics elsewhere, has
been Switzerland's purported freedom from EU shackles. The country's
refusal to join the Union supposedly allowed it to maintain its sovereignty
and remain distinct from its neighbors who had to bow to Brussels. Yet
today, most Swiss laws have been brought into conformity with EU norms—a
requirement for trading with the Union. A little more than a year ago,
Switzerland joined the EU's Schengen zone (which allows internal travel
without passports), something not even Britain can boast of. As a result,
some 3,000 Germans now arrive monthly to work and live in the country.
According to Christa Markwalder, a young Swiss M.P., her country is now a
"passive member of the EU"—a status that affords it some benefits but no
input in decision making.
That fact has led Markwalder and others, including Jakob Kellenberger, the
head of the Geneva-based International Committee of the Red Cross, to
advocate for full EU membership. But such calls are opposed by the growing
weight of the nationalist Swiss People's Party, which initiated the
anti-minaret referendum. The party boasts a steady 30 percent support among
voters—while none of the other 11 parties in the Swiss Parliament can
muster more than 20. The nationalists are now campaigning to limit the
number of German university teachers and doctors allowed into the country.
With anti-foreigner and anti-immigrant identity politics becoming more
powerful, Switzerland has even seen an upsurge in the popularity of
Schwizerdütsch, the Swiss dialect impenetrable to other German speakers.
Most TV programs other than the news are now broadcast in the dialect.
While many Swiss long to withdraw from the world, in other ways the
country's old neutrality is rapidly vanishing. In the 20th century,
Switzerland rejected fascism and communism but also avoided entangling
alliances, rea-soning that doing so would allow it to make profits and
enjoy access everywhere. In reality, Switzerland was firmly anchored in the
Western free-market democratic camp. But in today's no-polar world, with
the United States, the big EU countries, Russia, China, and others all
jousting for influence, Switzerland's nonalignment has rendered it
irrelevant. Its president and foreign minister have kowtowed to dictators
in Iran, North Korea, and Libya with no reward. The fabled Swiss passport
now counts for little. Libya's Muammar Kaddafi is holding two Swiss
businessmen hostage in reprisal for the arrest of Kaddafi's son Hannibal in
July 2008 for beating up his servants in a Geneva hotel. Switzerland's
efforts to mediate with Iran and North Korea have been scorned by other
powers. The country still boasts clever multilingual diplomats and
foreign-policy experts. But the Swiss are now regularly pushed around by
Washington and Brussels and are of little interest to the rising world
powers.
Of course, the news from the Alps isn't all bad. Although it has been hit
by the recession, Switzerland posted 3 percent annual growth over the five
years prior to the banking crisis—higher than the rest of Europe. The
country suffers from neither the public nor the private indebtedness of the
Anglo-Saxon world and hasn't faced the collapse of a housing bubble, as
Spain and Ireland have. Swiss unemployment may have risen, but it still
stands at only 4.4 percent, less than half the EU average. The country
boasts more green industry and technology actually in operation than any
other nation in the world. Rule of law, a vigorous press, and a
corruption-free state continue to make it attractive.
But the country seems utterly bereft of the kind of leaders or thinkers who
could help it out of its current morass. Most Swiss politicians seem cozily
comfortable with the old myths, and can't comprehend the criticism about
the rising xenophobia in their politics. Part of the problem is structural.
Because of Switzerland's unique form of direct democracy, any initiative by
the Parliament in Bern or the seven-member Federal Council can be easily
blocked by the threat of a referendum or by individual cantons, whose local
politicians control Parliament's second chamber. This system allows the
Swiss people much more say in the workings of government than almost any
other country's citizens (although turnout for elections and referendums is
very low). But it also stops the country's national leadership from making
any tough decisions. In the past this might not have mattered, as
Switzerland pottered along getting richer and trading off its non-EU
neutrality.
Now the old ways are no longer working. Switzerland today is just a small,
self-involved European country, not fully in or fully outside the EU, with
little influence anywhere. The rest of the world may still make its annual
pilgrimage to Davos. But the participants at the global meeting seem to
have little interest in or awareness of the nation in which they are
meeting. Switzerland may have always been about more than cuckoo clocks and
skiing. But just what those other attributes are is becoming harder and
harder to see.
MacShane is a Labour M.P. and a former U.K. minister for Europe. Before
entering politics, he lived and worked in Switzerland.
Find this article at http://www.newsweek.com/id/233207