12 April 2023

The view from Switzerland, where big business rules

The streets are clean, the trains excellent, the politics consensual. But as the Credit Suisse bailout showed, Switzerland’s ruling class prizes capitalism above all.

By Matthew Engel

Photo by Simmon Roberts/Millennium Images, UK

A prematurely warm and sunny Sunday afternoon in February. Scene: the centre of the lakeside town of Nyon, near Geneva. I had been admiring the 13th-century castle and was wandering down to the lake-front for an al fresco coffee. Nyon was not packed, but populated enough on such a lovely day. Suddenly I noticed something: the silence.

I stood still and there was no sound at all. No traffic noise, no footsteps, no chatter, no songbirds (possibly all shot by French gunmen across the lake) – nothing. I live in deep English countryside; it is never this quiet. Several minutes later, a plane flew overhead and the spell was broken. But the whole place remained subdued: the cars on the main road by the lake moved stealthily; a children’s playground had a sign referring to “un espace de tranquillité”.

Admittedly, it was Sunday, which in Switzerland is observed with eccentric zeal as if Calvin was still laying down God’s law up the road. But actually the cities were little different on weekdays. This is a soft-spoken, non-argumentative, self-policing country, which has no national religion or language of its own yet remains utterly distinct from its turbulent neighbours.

Some visitors find it a bit chilling, sinister even. One can sense strange undercurrents. Could this be a version of The Truman Show? Stepford? Portmeirion in The Prisoner? Hot Fuzz, suggested one British expat more attuned to 21st-century culture. Nothing seems quite real.

There’s certainly nowhere else like it. For a start, there is no single head of state (as with the very different cases of Andorra and Bosnia).The seven members of the Federal Council function as a collective – there is a rotating chair, but hardly anyone in the general population knows who sits there. “Maybe two out of ten,” said Nenad Stojanović, professor of politics at the University of Geneva, when we spoke. “I asked the undergraduates actually studying the subject, and less than half of them knew.”

But then it hardly matters. Swiss politics is thoroughly devolved to the 26 cantons (as powerful as US states), the municipalities, and to every Swiss adult who, about six times a year, gets a thick envelope seeking binding referendum votes. Gay marriage? Yes! Keep guns at home? Yes! Minarets? No! Burqas? No! Join the EU? No! Join the Schengen Area? Yes! It is an elegant system full of checks and balances.

Direct democracy lies deep in Swiss history, though women’s suffrage was not wholly implemented until 1990 when the male voters of the last holdout canton finally capitulated. And the regular referenda do not necessarily produce much enthusiasm: turnout is often below 50 per cent. But enthusiasm is not really a Swiss characteristic, nor are they deeply politicised. In most countries where the seat of government is not the biggest city, the capital is obsessed with political minutiae and manoeuvres. Walking round Berne, the only propaganda posters I saw were environmental, either global or hyper-local. The federal parliament sits just 12 weeks a year; the sociable US-based children’s charity Kiwanis International meets next door in the Bellevue Palace Hotel every Monday lunchtime.

What the Swiss really like is being Swiss. Even the language barriers produce little animosity, nothing like the suppressed hatred between Flemings and Walloons in Belgium. It is a faux pas/fehltritt/passo falso to refer to French-, German- or Italian-speaking Swiss as Frenchmen, Germans or Italians. Nor do they necessarily feel much affinity to their land of distant origin. Locally, there are concessions to the quiz-question favourite and fourth local language of Romansh. And English works almost anywhere. I met one man who was fluent in five languages and could get by in four more. No big deal here. Nowhere in the world have I felt so inferior with my OK English and feeble French.

There is another reason for a Briton to feel inferior. In 2000 the euro equalled about 1.6 Swiss francs and the pound 2.6. It was not cheap even then. Now the three are almost neck-and-neck. During the Trussian crisis in 2022, the franc almost overtook sterling. Trying to book a room in St Moritz, I was invited to pay not far off £100 a night for a bed in a dormitory. In the Second World War, Switzerland was a sometimes elusive place of refuge from the evils that encircled them; now its neighbours beckon as countries where one might find an affordable lunch.

Energetic British travellers have loved the healthy Swiss air and mountain scenery since Victorian times, and the skiing since ski-lifts were installed between the world wars. There are other delights. Everything and everyone is so clean; perhaps only Antarctica has less graffiti. The epitome of Swissness is the railway system whose trains glide serenely and punctually across the country despite the challenging geography and the winter snows. It is 100 per cent electrified (Britain: 38 per cent) and a source of pride (Britain: national laughing stock).

Mark Smith, who runs the train travel website The Man in Seat 61, offers another statistic: 16 per cent of journeys are made by rail, double the EU average and about three times the British level, even before Covid. “Businessmen and politicians habitually travel by train,” said Smith. “I don’t know whether it’s good because the elite use it or the other way round. Chicken and egg.” The network is not wholly nationalised, but it is totally integrated, with connections carefully calibrated and rarely missed. (Britain: shambles.)

Precision is of course a Swiss speciality: Rolex, Swiss Army Knife, the Matterhorn shapes of Toblerone bars. That requires a biddable workforce and a managerial commitment to burnishing brand reputation. Take Rolex: no logical person would buy a £50,000 watch when a £20 Japanese number works just as well and is less likely to be torn off your wrist.

But here there is little fear of low-level crime. Fare evasion on public transport is estimated at 3 per cent, though checks are far from routine, especially on trams and buses. The Swiss also obey laws governing behaviour at home that are mostly unwritten and enforced by peer pressure. The rules of a Swiss Sunday are fierce and unique: no laundry, no car washing, no lawn mowing; nearly all shops are closed. The religious roots of this have long since withered but referenda consistently back the status quo.

Owners of apartment blocks usually codify their own non-sabbatarian rules: no pets, no music, loud laughter or baths late at night. Sometimes even at lunchtime. Stories of bans on post-10pm toilet-flushing may be urban myths, and the other rules may be just good manners – but here manners are compulsory.

In the countryside, there is more privacy but greater surveillance. “The eyes of a Swiss village are always 20:20,” said Matthew Stevenson, an American travel writer who has lived near Geneva for 30 years. He tells the story of a boy riding a bike through his village at 7.10pm on a summer’s evening. “Go home!” said a passer-by. “You’re late for dinner!” Was it any of his business? Stevenson shrugged: “Every decent Swiss family has dinner at seven.”

In wartime, when the threat of Nazi invasion was real and spies were an ever-present threat, the all-knowing village postwoman was the first line of defence. Even in peacetime her eyes were the sharpest. Hitler did not hold off invading Switzerland for fear of offending its neutrality, but for fear of the terrain (more than 200 summits above 12,000 feet – good luck with that), and Swiss courage and ingenuity. Also, having a non-combatant next door had its uses for the Nazis.

Swiss neutrality is still maintained by constant vigilance. Every kitchen traditionally contained a firearm, and many still do – always rigorously cleaned like everything else, though rarely used (the murder rate is very low). At 20, every male is subject to military service or a longer, unarmed alternative, confirmed in a 2013 referendum.

Conscription? Yes! That shared rite of passage might explain one source of national togetherness. There is another.

“The business of Switzerland is business,” said a local journalist, cautious enough to insist on anonymity. “And the country is run by an extremely wealthy oligarchy of old money. The main job of the federal government is to coordinate the framework that allows business to operate. Ruthlessly if necessary.” The crucial beneficiaries of this are the banks, big pharma, Nestlé and a few arms dealers: all of them globally respected for their expertise, but not necessarily for their scruples. And if one of the nation’s buttresses wobbles in the wind, as Credit Suisse just did, Switzerland plc quickly effects repairs.

[See also: Are we headed for another banking crisis?]

In their relations with the EU, the Swiss have mastered the art of playing the nimble Road Runner to Brussels’ slow-witted coyote. They have a whole variety of bilateral treaties and take great care to cede only minimum control. “Cherry-pickers,” other EU members moan. Boris Johnson called it cake-eating, but lacked the skill to achieve it.

There is free movement, the Swiss being confident that 8.7 million pairs of eyes will soon spot a wrong’un. But unwelcome business competitors get a cool reception. Their home-grown supermarkets, Migros and Coop, dominate the high streets, and Aldi and Lidl find it harder than usual to make an impact. Amazon has no foothold in Switzerland, and it is complicated and pricey to get its packages from abroad.

Neutrality is more difficult in the current war. “The Swiss tried to stave off imposing sanctions on Russia,” said Professor Stojanović. “But when the US started threatening, they had to comply.” Still, one estimate is that there are 200 billion francs’ worth of Russian assets in Swiss banks and that only eight billion of them have been frozen. Meanwhile, Switzerland certainly enjoys the benefits of its alleged neutrality. “Look at that!” said Matthew Stevenson as we drove along a beautifully maintained suburban road, with well-marked cycle lanes and a magnificent tram line, with perfectly tended grass running alongside. “That’s what you can do when you don’t send troops to Iraq.”

The Swiss devotion to self-interest also has deep roots. “The Swiss fleece you with admirable gravity,” wrote George Meredith in 1861. “Not a people so much as a neat, clean, solvent business,” said William Faulkner. Jonathan Raban was less admiring: “A whole country of phobic hand washers living in a giant Barclays Bank.” And one word crops up regularly from dyspeptic visitors: “smug”. You don’t have to go there to sense it. Switzerland’s most famous living person is Roger Federer: brilliant, elegant, polite, very pleased with himself.

And yet. One can argue whether this is the world’s most beautiful country, but it is surely the least ugly. Houses on mountainsides are usually repulsive; Swiss chalets look as though they were carefully placed by God. Even the politics has a rare beauty. “The system is based on a profound conviction in favour of consensus and compromise,” Philippe Mottaz, editor of the Geneva Observer, marvelled when we spoke. “It’s slow, it’s difficult to achieve, it can be a recipe for stasis. But it means building a state based on solid policies.”

Earlier on the Sunday of the silence in Nyon, I took the narrow-gauge train three thousand feet up the Jura mountains to the little resort town of Saint-Cergue. On the ascent some snow lingered in the shadows and gullies, but otherwise the landscape was April-green. This is not a famous ski venue, but it is popular with day-trippers from Geneva and the town had been looking forward to a bumper half-term week.

Instead, they had closed the slopes two days earlier. “Ce n’est pas normal,” said Katrin in the tourist office. “This has never happened before.” There was more mud than snow and a few kids pathetically made the most of some lingering ice and tobogganed down about ten feet.

Far more famous resorts than this have been affected. With a tin ear turned towards the cause of this disaster, the celebrity-haunted Gstaad hired a helicopter to bring in snow in January. The Alps, according to the New York Times, are warming at double the global average. Even St Moritz, 6,000 feet up, has problems: its annual horse racing and cricket-on-ice may both be in medium-term jeopardy.

The reputation of Switzerland as a place to enhance and perhaps extend one’s life through clean air and exercise may have to be revisited. But it should still retain the opposite kind of tourism. Dignitas is likely to continue to allow people to come to Zurich to be helped to die on their own terms. It was ratified in a referendum ten years ago. Assisted dying? Yes! But this being Switzerland, for £10,000-plus.