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Economy of Switzerland
Swiss banknotes
Rank	27th [1]
Currency	1 Swiss franc (CHF 1)
Fiscal year	Calendar year
Trade organisations	EFTA, WTO and OECD
Statistics
GDP	CHF 550.6 billion (2010)[2][3][4] $527.9 billion $364.5 billion PPP
GDP growth	2.8% nominal 1.7% per capita nominal 2.7% real 1.6% per capita real
GDP per capita	CHF 70,334 $75,440 current (nominal) $46,815 PPP[5]
GDP by sector	agriculture (1.2%) industry (27.5%) services (71.3%) (2011 est.)
Inflation (CPI)	0.2%[6]
Population below poverty line	4.8 %[7]
Gini coefficient	33.7 (2008)
Labour force	4.547 million[8]
Labour force by occupation	agriculture (3.4%) Industry (23.4%) services (73.2%) (2010)
Unemployment	3.1% (2011)[9]
Main industries	machinery, chemicals, watches, textiles, precision instruments
Ease of Doing Business Rank	26th[10]
External
Exports	$308.3 billion (2011 est.)
Export goods	machinery, chemicals, metals, watches, agricultural products
Main export partners	Germany 19.2%, US 10.2%, Italy 7.9%, France 7.7%, UK 5.9% (2010)
Imports	$299.6 billion (2011 est.)
Import goods	machinery, chemicals, vehicles, metals; agricultural products, textiles
Main import partners	Germany 32%, Italy 10.2%, France 8.5%, US 5.3%, Netherlands 4.5%, Austria 4.3% (2010)
FDI stock	$395.6 billion (31 December 2009 est.)
Gross external debt	$1.346 trillion (30 June 2011)
Public finances
Public debt	52.4% of GDP (2011 est.)
Revenues	$222 billion (2011 est.)
Expenses	$216.8 billion (2011 est.)
Economic aid	donor: ODA CHF2.31 billion (0.47% of GDP)[11]
Credit rating	Standard & Poor's:[12] AAA (Domestic) AAA (Foreign) AAA (T&C Assessment) Outlook: Stable[13] Moody's:[13] Aaa Outlook: Stable Fitch:[13] AAA Outlook: Stable
Foreign reserves	US$291.073 billion (March 2011)[14]
Main data source: CIA World Fact Book All values, unless otherwise stated, are in US dollars

The economy of Switzerland is one of the world's most stable economies. Its policy of long-term monetary security and political stability has made Switzerland a safe haven for investors, creating an economy that is increasingly dependent on a steady tide of foreign investment. Because of the country's small size and high labor specialisation, industry and trade are the keys to Switzerland's economic livelihood. Switzerland has achieved one of the highest per capita incomes in the world with low unemployment rates and a balanced budget. The service sector has also come to play a significant economic role.

History[link]

Switzerland's agrarian sector shrank during the Industrial Revolution. Its industrial sector began to grow in the mid-19th century, and had become the largest in Europe by the beginning of the 20th century. At this point, Switzerland was the wealthiest country in Europe^{[citation needed]}.

During World War I, Switzerland suffered an economic crisis. It was marked by a decrease in energy consumption, energy being mostly produced by coal in the 1910s, 1920s, 1930s and 1940s. The war tax^[specify] was introduced. As imports were difficult, attempts were made to strengthen the Swiss economy. The cultivation of grain was promoted, and the Swiss railway became the first to use electric instead of coal-burning, steam-driven engines^{[citation needed]}.

In the 1920s Switzerland's energy consumption increased^{[citation needed]}.

Throughout the 1930s Switzerland's energy consumption stagnated^{[citation needed]}.

In the 1940s, particularly during World War II the economy profited from the increased export and delivery of weapons to the German Reich. However, Switzerland's energy consumption decreased rapidly. The conduct of the banks cooperating with the Nazis^{[citation needed]} and the commercial relations with the axis powers during the war became the subject of sharp criticism, resulting in a short period of international isolation of Switzerland from the world. After World War II, Switzerland's production facilities remained to a great extent undamaged which facilitated the country's swift economic resurgence^{[citation needed]}.

In the 1950s, annual GDP growth averaged 5% and Switzerland's energy consumption doubled. Coal lost its rank as Switzerland's primary energy source, as other fossil fuels such as crude and refined oil and natural and refined gas imports increased. This decade also marked the transition from an industrial economy to a service economy. Since then the service sector has been growing faster than the agrarian and industrial sectors^{[citation needed]}.

In the 1960s, annual GDP growth averaged 4% and Switzerland's energy consumption doubled. By the end of the decade oil was Switzerland's primary energy source^{[citation needed]}.

Founded in 1971, the World Economic Forum is one of the major annual meetings in the world

In the 1970s GDP growth rates gradually declined from a peak of 6.5% in 1970 until contracting 7.5% in 1975 and 1976. Switzerland became increasingly dependent on oil imported from its main supplier, the OPEC cartel. The 1973 international oil crisis caused Switzerland's energy consumption to decrease from 1973 to 1977. In 1974 there were three nationwide car-free Sundays when private transport was prohibited as a result of the oil supply shock. From 1977 onwards GDP grew, however Switzerland was also affected by the 1979 energy crisis which resulted in a short term decrease of Switzerland's energy consumption^{[citation needed]}.

In the 1980s, Switzerland was affected by the hike in oil prices which resulted in a decrease of energy consumption until 1982 when the economy contracted by 1.3%. From 1983 on both GDP and energy consumption grew^{[citation needed]}.

In the 1990s, Switzerland's economy was marred by slow growth, having the weakest economic growth in Western Europe. The economy was affected by a 3-year-recession from 1991 to 1993 when the economy contracted by 2%, which also became apparent in Switzerland's energy consumption and export growth rates. Switzerland's economy averaged no appreciable increase (only 0.6% annually) in gross domestic product (GDP). After having unemployment rates lower than 1% prior to 1990, the 3-year-recession also caused the unemployment rate to rise to its all-time-peak of 5.3% in 1997. And thus, as of 2008, Switzerland is at the second place among European countries with populations above one million in terms of nominal and purchasing power parity Gross Domestic Product per capita, behind Norway (see list). On numerous occasions in the 1990s real wages decreased since nominal wages couldn't keep up with inflation. However, beginning in 1997, a global resurgence in currency movement provided the necessary stimulus to the Swiss economy. It slowly gained momentum and peaked in the year 2000 with 3.6% growth in real terms^{[citation needed]}.

In the early 2000s recession, being so closely linked to the economies of Western Europe and the United States, Switzerland was not able to escape the slowdown felt in these countries. After the worldwide stock market crashes in the wake of the 9/11 terrorism attacks there were more announcements of false enterprise statistics and exaggerated managers' wages. In 2001 the rate of growth dropped to 1.2%, to 0.4 % in 2002 and in 2003 the real GDP contracted by 0.2%. That economic slowdown had a noticeable impact on the labour market. Many companies announced mass dismissals and thus the unemployment rate rose from its low of 1.9% in June 2000 to its peak of 3.9% in October 2004, although well below the European Union (EU) unemployment average of 8.9%. The consumer mood worsened and domestic consumption decreased^{[citation needed]}. The exports of goods and services in the EU and the USA decreased as a result of the Swiss Franc's appreciation in value which caused an increase in prices of exported goods and services. On the other hand Switzerland's tourism sector slumped and room occupation rates by foreign guests decreased. Besides that a deficit of market competition in many branches of Switzerland's economy persisted^{[citation needed]}.

On the 10.11.2002 the economics magazine Cash published 5 measures which political and economic actors were suggested to implement so that Switzerland would once again experience an economic revival:

1. Private consumption should be promoted with decent wage increases. In addition to that families with children should get discounts on their health insurances.

2. Switzerland's national bank should revive investments by lowering interest rates. Besides that monetary institutes should increasingly credit consumers and offer cheaper land zones which are to be built on.

3. Switzerland's national bank is asked to devalue the Swiss Franc, especially compared to the Euro.

4. The government should implement the anti-cyclical measure of increasing budget deficits. Government spending should increase in the infrastructural and educational sectors. Lowering taxes would make sense in order to promote private household consumption.

5. Flexible work schedules should be instituted, thus avoiding low demand dismissals.

These measures were applied with successful results along with the government's policy of the Magical Hexagon which consists of full employment, social equality, economic growth, environmental quality, positive trade balance and price stability. The rebound which started in mid 2003 saw growth rate growth rate averaging 3% (2004 and 2005 saw a GDP growth of 2.5% and 2.6% respectively; for 2006 and 2007, the rate was 3.6%). In 2008, GDP growth was modest in the first half of the year while declining in the last two quarters. Because of the base effect, real growth came to 1.9%. While it contacted 1.9% in 2009, the economy started to pick up in Q3 and by the second quarter of 2010, it had surpassed its previous peak. Growth for 2010 stood at 2.6%^[15] The stock market collapse has deeply affected investment income earned abroad. This has translated to a substantial fall in the surplus of the current account balance. In 2006, Switzerland recorded a 15.1% per GDP surplus. It went down to 9.1% in 2007 and further dropped to 1.8% in 2008. It recovered in 2009 and 2010 with a surplus of 11.9% and 14.6% respectively. As of the first quarter 2010, Switzerland house prices are still edging up.^[16]

This is a chart of trend of gross domestic product of Switzerland at market prices estimated^[15] by the Swiss Government with figures in millions of Swiss Francs.

Sectors[link]

The city of Zurich, the most important of the country and one of the world's major financial centers, hosts the Swiss Stock Exchange

The Swiss economy follows the typical First World model with respect to the economic sectors. Only a small minority of the workers are involved in the Primary or Agricultural sector (3.8% of the population, in 2006^[update]) while a larger minority is involved in the Secondary or Manufacturing sector (23% in 2006^[update]). The majority of the working population are involved in the Tertiary or Services sector of the economy (73.2% in 2006^[update]).^[17] While most of the Swiss economic practices have been brought largely into conformity with the European Union's policies, some trade protectionism remains, particularly for the small agricultural sector.^[18]

Industrial[link]

Switzerland has an extensive industrial sector, it is not very well known around the world but present with companies in different industrial sectors such as food processing like Nestlé, chemical for industrial and construction use like Sika AG, pharmaceutical like Novartis, roof coating Sarnafil, among many others.

Agriculture[link]

Swiss free-range cattle.

Emmentaler (also known as Swiss Cheese), while some Swiss types are AOC restricted, generic Emmentaler is produced around the world.

The examples and perspective in this article may not include all significant viewpoints. Please improve the article or discuss the issue. (January 2011)

Switzerland is extremely protective of its agricultural industry. High tariffs and extensive domestic subsidisations encourage domestic production, which currently produces about 60% of the food consumed in the country.

According to the Organisation for Economic Co-operation and Development (OECD), Switzerland is subsidising more than 70% of its agriculture compared to 35% in the EU. The 2007 Agricultural Program, recently adopted by the Swiss Federal Assembly, will increase subsidies by CHF 63 million to CHF 14.092 billion.

Protectionism acts to promote domestic production, but not to reduce prices or the cost of production, and there is no guarantee the increased domestic production is actually consumed internally; it may simply be being exported, to the profit of the producers. 90 to 100% of potatoes, pork, veal, cattle and most milk products, are produced in the country. Beyond that, Swiss agriculture meets sixty-five per cent of the domestic food demand.^[19]

Prices are not reduced because, in the absence of import tariffs, the price of food would settle to that of the cheapest provider (which would often be external to Switzerland thus more costly in food miles). Import tariffs raise the price of imported food and Swiss domestic production only has to be cheaper than these artificially raised prices. The consumer pays more than they otherwise would.^{[dubious – discuss]}

The cost of production is not reduced by subsidy; it merely makes the final point-of-sale price lower than it would otherwise be, since some of the cost of production is borne by the State. However, the State obtains the money for the subsidy by taxation, which falls ultimately on the consumer. Subsidy merely alters who pays for what (although in this case it now pays for farming practices that are environmentally respectful). Furthermore, if the food products produced are in fact being exported, the subsidy of their production costs makes them unusually competitive in the world market, which increases the profits of the producers; in other words, the State is in fact taxing the local population with an outcome which is actually merely to increase the profit of food producers.^{[dubious – discuss]}

The stringent policy of agricultural protectionism is generally harmful to the workforce.^{[citation needed]} Domestic agriculture acts as a shield against beneficial import of labour.^{[citation needed]} Some people^[who?] assert that Switzerland has a high cost of living not only in food but also rents, since much land needed for human occupation is retained by farms, but this is easily countered by statistics. About 40% of Switzerland is used for agricultural purposes, alpine pastures included,^[19] and the surface of arable and permanent cropland is 10.6 percent of total land area (Europe 13.4%, world 11.3% - 1998 survey). This corresponds with 61 hectares of cropland per 1,000 people (Europe 422 ha/1000 people, world 251 ha/1000 people)^[19][20] Thus the high rents are probably caused primarily by other factors such as the high population density and the tiny size of the country.

The first reform in agricultural policies was in 1993. Among other changes, since 1998 Switzerland has linked the attribution of farm subsidies with the strict observance of good environmental practice. Before farmers can apply for subsidies, they must obtain certificates of environmental management systems (EMS) proving that they: “make a balanced use of fertilizers; use at least 7% of their farmland as ecological compensation areas; regularly rotate crops; adopt appropriate measures to protect animals and soil; make limited and targeted use of pesticides.”^[21] 1,500 farms are driven out of business each year. But the number of organic farms increased by 3.3 percent between 2003 and 2004, and organic sales increased by 7 percent to $979 million.^[22] Moreover, Swiss consumers consider less important the drawback of higher prices for organic food compared to locally produced, conventional food.^[19]

Trade[link]

Imports in 2009

Exports in 2009

Graphical depiction of Switzerland's product imports and exports from 2009 in 28 color coded categories

The CIA World Factbook estimates Switzerland's 2011 exports at $308.3 billion and the 2010 exports at $258.5 billion. Imports are estimated to be $299.6 billion in 2011 and $246.2 billion in 2010. According to the World Factbook numbers, Switzerland is the 20th largest exporter and the 18th largest importer.^[18] The United Nations Commodity Trade Statistics Database has lower numbers for Switzerland's exports and imports. The UN calculates exports at $223.5 billion in 2011 and $185.8 billion in 2010. The value of all imports in 2011 was $197.0 billion and in 2010 it was $166.9 billion.^[23]

Switzerland's largest trading partner is Germany. In 2009, 21% of Switzerland's exports and 29% of its imports came from Germany. The United States was the second largest destination of exports (9.1% of total exports) and the fourth largest source of imports (6.7%). Switzerland's neighbors made up next largest group; Italy was third for exports (8.6%) and second for imports (10%), France was fourth for exports (8%) and third for imports (8.1%) and Austria was fifth for exports (4.6%) and sixth for imports (3.7%). Major non-European trading partners included; Japan (seventh for exports with 3.6% and twelfth for imports with 2%), China (eighth for exports and imports with 3.1% and 2.5% respectively) and Turkey (sixteenth for exports with 1.2% and ninth for imports with 2.3%).^[24]

As a first world country with a skilled labor force, the majority of Swiss exports are precision or high tech finished products. Switzerland's largest specific SITC categories of exports include; medicaments, glycosides and vaccines, watches, orthopaedic appliances and precious jewelery. Some raw ores or metals are exported, but the majority of the exports in this category are finished jewelery or other finished products. Agricultural products that Switzerland is famous for, such as cheese (0.29%), wine (0.05%) and chocolate (0.39%) all make up only a small portion of Swiss exports and agricultural products make up only a small portion of all exports.^[24]

Switzerland's main imports include; medicaments, cars, precious jewelery and other unclassified transactions. While Switzerland has a long tradition of manufacturing cars,^[25] there are currently no large-scale assembly line automobile manufacturers in the country.

Tourism[link]

Photochrom of the Hotel Wildstrubel in the Bernese Oberland in the 1890's.

Switzerland has a highly developed tourism infrastructure, especially in the mountainous regions and cities, making it a good market for tourism-related equipment and services.

14% of hotels were in Grisons, 12% each in the Valais and Eastern Switzerland, 11% in Central Switzerland and 9% in the Bernese Oberland. The ratio of lodging nights in relation to resident population ("tourism intensity", a measure for the relative importance of tourism to local economy) was largest in Grisons (8.3) and Bernese Oberland (5.3), compared to a Swiss average of 1.3. 56.4% of lodging nights were by visitors from abroad (broken down by nationality: 16.5% Germany, 6.3% UK, 4.8% USA, 3.6% France, 3.0% Italy) ^[26]

The total financial volume associated with tourism, including transportation, is estimated to CHF 35.5 billion (as of 2010) although some of this comes from fuel tax and sales of motorway vignettes. The total gross value added from tourism is 14.9 billion. Tourism provides a total of 144,838 full time equivalent jobs in the entire country. The total financial volume of tourist lodging is 5.19 billion CHF and eating at the lodging provides an additional 5.19 billion. The total gross value added of 14.9 billion is about 2.9% of Switzerland's 2010 nominal GDP of 550.57 billion CHF.^[27][28]

Banking[link]

Bank of International Settlements in Basel

In 2003, the financial sector comprised an estimated 11.6% of Switzerland's GDP and employed approximately 196,000 people (136,000 of whom work in the banking sector); this represents about 5.6% of the total Swiss workforce.^[29]

Swiss neutrality and national sovereignty, long recognized by foreign nations, have fostered a stable environment in which the banking sector was able to develop and thrive. Switzerland has maintained neutrality through both World Wars, is not a member of the European Union, and was not even a member of the United Nations until 2002.^[30][31]

Currently an estimated 28 percent of all funds held outside the country of origin (sometimes called "offshore" funds) are kept in Switzerland.^[32] In 2009 Swiss banks managed 5.4 trillion Swiss Francs.^[33]

The Bank of International Settlements, an organization that facilitates cooperation among the world's central banks, is headquartered in the city of Basel. Founded in 1930, the BIS chose to locate in Switzerland because of the country's neutrality, which was important to an organization founded by countries that had been on both sides of World War I.^[34]

Foreign banks operating in Switzerland manage 870 billion Swiss francs worth of assets (as of May 2006^[update]).^[35]

Workforce[link]

The Swiss economy is characterised by a skilled and generally 'peaceful' workforce. One quarter of the country's full-time workers are unionised. Labour and management relations are amicable, characterised by a willingness to settle disputes instead of resorting to labour action. About 600 collective bargaining agreements exist today in Switzerland and are regularly renewed without major problems.

With the peak of the number of bankruptcies in 2003, however, the mood was pessimistic. Massive layoffs and dismissals by enterprises resulting from the global economic slowdown, major management scandals and different foreign investment attitudes have strained the traditional Swiss labour peace. Swiss trade unions have encouraged strikes against several companies, including Swiss International Air Lines, Coca-Cola, and Orange. Total days lost to strikes, however, remain among the lowest in the OECD.

Income[link]

Switzerland is among the world's most prosperous countries in terms of private income. In 2007 the gross median household income in Switzerland was an estimated 107,748 CHF, or USD 137,094 at purchasing power parity. The median income after social security, taxes and mandatory health insurance was 75,312 CHF, or USD 95,824 at purchasing power parity.

Economic policy[link]

Terrorism[link]

Through the United States-Swiss Joint Economic Commission (JEC), Switzerland has passed strict legislation covering anti-terrorism financing and the prevention of terrorist acts, marked by the implementation of several anti-money laundering procedures and the seizure of al-Qaeda accounts. Continued relationship with the United States through the JEC has brought the Swiss economy into closer proximity with that of the Western world,^{[citation needed]} with mutualistic goals in terrorism prevention providing the impetus.^{[citation needed]}

European Union[link]

Apart from agriculture, there are minimal economic and trade barriers between the European Union and Switzerland. In the wake of the Swiss voters' rejection of the European Economic Area Agreement in 1992, the Swiss Government set its sights on negotiating bilateral economic agreements with the EU. Four years of negotiations culminated in Bilaterals, a cross-platform agreement covering seven sectors: research, public procurement, technical barriers to trade, agriculture, civil aviation, land transport, and the free movement of persons. Parliament officially endorsed the Bilaterals in 1999 and it was approved by general referendum in May 2000. The agreements, which were then ratified by the European Parliament and the legislatures of its member states, entered into force on June 1, 2002. The Swiss government has since embarked on a second round of negotiations, called the Bilaterals II, which will further strengthen the two organisations' economic ties.

Switzerland has since brought most of their practices into conformity with European Union policies and norms in order to maximise the country's international competitiveness. While most of the EU policies are not contentious, police and judicial cooperation to international law enforcement and the taxation of savings are controversial, mainly because of possible side effects on bank secrecy.

Swiss and EU finance ministers agreed in June 2003 that Swiss banks would levy a withholding tax on EU citizens' savings income. The tax would increase gradually to 35% by 2011, with 75% of the funds being transferred to the EU. Recent estimates value EU capital inflows to Switzerland to $8.3 billion.

Institutional membership[link]

Switzerland is a member of a number of international economic organizations, including the United Nations, the World Trade Organization, the International Monetary Fund, the World Bank, and the Organisation for Economic Co-operation and Development.

International comparison[link]

Regional disparities[link]

Cantons	Tax index for all Federal, Cantonal and Church Taxes (Switzerland = 100.0) 2006	Tax rate (% of total income) for a married couple with two children and 50,000CHF in income 2006	Tax rate (% of total income) for a married couple with two children and 150,000CHF in income 2006	Population under 20 as a percentage of total population aged 20–64 2007	National Income per person in CHF 2005	Change in National Income per person 2003-2005
Switzerland	100	2.36	11.56	34.59	54,031	5.3
ZH Zurich	82.9	2.16	8.65	31.12	68,803	4.6
BE Bern	123.1	2.14	13.91	33.05	45,643	5
LU Lucerne	119	3.47	12.56	37.19	43,910	5.3
UR Uri	144.2	4.54	12.42	37.06	45,711	5.3
SZ Schwyz	66.5	2.26	6.98	36.95	50,170	6.3
OW Obwalden	146.5	4.14	11.53	40.88	39,645	4.7
NW Nidwalden	79.1	2.31	9.41	34.55	73,285	15.6
GL Glarus	134.8	4.62	12.56	36.85	73,236	10.9
ZG Zug	50.3	0.47	5.5	35.45	93,752	5.4
FR Fribourg	126.4	2.33	12.74	40.2	39,559	2.6
SO Solothurn	116.9	2.36	12.95	34.34	46,844	4.9
BS Basel-Stadt	113.1	1.01	14.3	26.6	115,178	15.9
BL Basel-Landschaft	92.5	2.12	12.4	33	53,501	3.9
SH Schaffhausen	114.6	2.94	11.62	32.92	55,125	5.4
AR Appenzell Ausserrhoden	121.7	3.8	12.06	37.6	44,215	4.7
AI Appenzell Innerrhoden	105.6	3.18	9.88	44.46	45,936	7.4
SG St. Gallen	115.5	2.53	12.68	37.66	44,866	4
GR Grisons	112.2	2.99	11.51	33.97	49,355	11.7
AG Aargau	87.4	1.52	10.4	34.9	49,209	2.5
TG Thurgau	86.6	0.34	11.48	37.52	44,918	3.2
TI Ticino	64.6	0.24	9.04	31.14	41,335	3.4
VD Vaud	106.2	0.42	12.2	37.87	52,901	3.4
VS Valais	121.3	2.72	10.68	35.18	38,385	6
NE Neuchâtel	137.1	3.8	15.96	38.06	49,775	6.6
GE Geneva	89.8	0.05	11.81	35.4	62,839	5.1
JU Jura	126.6	2.87	15.26	40.09	38,069	6.4

Source:^[45]

See also[link]

• Taxation in Switzerland
• Science and technology in Switzerland
• Merchant Marine of Switzerland
• Economy of Europe
• Federation of the Swiss Watch Industry FH
• 2000-watt society
• Swiss National Bank
• Banking in Switzerland

References[link]

External links[link]

Wikimedia Commons has media related to: Economy of Switzerland

• OECD's Switzerland country Web site and OECD Economic Survey of Switzerland
• SWISS MARKET IND
• Swiss Federal Statistical Office
• Gross Domestic Product Growth - Switzerland
• Swiss Economic Forecasts
• swissinfo.ch business news and articles

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Swiss Confederation Schweizerische Eidgenossenschaft (German) Confédération suisse (French) Confederazione Svizzera (Italian) Confederaziun svizra (Romansh) Confoederatio Helvetica (Latin)
Flag Coat of arms
Motto: Unus pro omnibus, omnes pro uno  (traditional) (Latin: One for all, all for one)
Anthem: Swiss Psalm
Location of  Switzerland  (green) in Europe  (dark grey)  —  [Legend]
Capital		Bern[note 1] (de facto) 46°57′N 7°27′E / 46.95°N 7.45°E / 46.95; 7.45
Largest city		Zurich
Official language(s)		German (63.7 %), French (20.4 %), Italian (6.5 %), Romansh[1] (0.5 %)
Demonym		Swiss
Government		Federal republic, with directorial system and direct democracy
-	Federal Council	Doris Leuthard Eveline Widmer-Schlumpf (Pres. 12) Ueli Maurer (VP 12) Didier Burkhalter Simonetta Sommaruga Johann Schneider-Ammann Alain Berset
-	Federal Chancellor	Corina Casanova
Legislature		Federal Assembly
-	Upper house	Council of States
-	Lower house	National Council
Independence
-	Foundation date	1 August[note 2] 1291
-	de facto	22 September 1499
-	Recognised	24 October 1648
-	Restored	7 August 1815
-	Federal state	12 September 1848[2]
Area
-	Total	41,285 km2 (133rd) 15,940 sq mi
-	Water (%)	4.2
Population
-	2011 estimate	7,952,600[3] (95th)
-	2000 census	7,452,075
-	Density	188/km2 (65th) 477.4/sq mi
GDP (PPP)		2011 estimate
-	Total	$339.890 billion[4]
-	Per capita	$43,369[4]
GDP (nominal)		2011 estimate
-	Total	$636.059 billion[4]
-	Per capita	$81,160[4]
Gini (2000)		33.7 (medium)
HDI (2011)		0.903[5] (very high) (11th)
Currency		Swiss franc (CHF)
Time zone		CET (UTC+1)
-	Summer (DST)	CEST (UTC+2)
Drives on the		right (trains: left)
ISO 3166 code		CH
Internet TLD		.ch
Calling code		+41

Switzerland (German: die Schweiz^{[note 3]} [ˈʃvaɪts]; French: Suisse [sɥis(ə)]; Italian: Svizzera [ˈzvit͡sːɛra]; Romansh: Svizra [ˈʒviːtsrɐ] or [ˈʒviːtsʁːɐ]), in its full name the Swiss Confederation (Latin: Confoederatio Helvetica, hence its abbreviation CH), is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in western Europe,^{[note 4]} where it is bordered by Germany to the north, France to the west, Italy to the south, and Austria and Liechtenstein to the east.

Switzerland is a landlocked country geographically divided between the Alps, the Swiss Plateau and the Jura, spanning an area of 41,285 km² (15,940 sq mi). While the Alps occupy the greater part of the territory, the Swiss population of approximately 8 million people is concentrated mostly on the Plateau, where the largest cities are to be found. Among them are the two global cities and economic centres of Zurich and Geneva.

The Swiss Confederation has a long history of armed neutrality—it has not been in a state of war internationally since 1815—and did not join the United Nations until 2002. It pursues, however, an active foreign policy and is frequently involved in peace-building processes around the world.^[6] Switzerland is also the birthplace of the Red Cross and home to a large number of international organizations, including the second largest UN office. On the European level, it is a founding member of the European Free Trade Association and is part of the Schengen Area – although it is notably not a member of the European Union, nor the European Economic Area.

Switzerland is one of the richest countries in the world by per capita gross domestic product, and has the highest wealth per adult (financial and non-financial assets) of any country in the world.^[7][8] Zurich and Geneva have respectively been ranked as the cities with the second and third highest quality of life in the world.^[9] It has the world's nineteenth largest economy by nominal GDP and the thirty-sixth largest by purchasing power parity. It is the twentieth largest exporter and eighteenth largest importer of goods.

Switzerland comprises three main linguistic and cultural regions: German, French, and Italian, to which the Romansh-speaking valleys are added. The Swiss, therefore, though predominantly German-speaking, do not form a nation in the sense of a common ethnic or linguistic identity. The strong sense of belonging to the country is founded on the common historical background, shared values (federalism and direct democracy)^[10] and Alpine symbolism.^[11] The establishment of the Swiss Confederation is traditionally dated to 1 August 1291; Swiss National Day is celebrated on the anniversary.

Etymology[link]

The English name Switzerland is a compound containing Switzer, an obsolete term for the Swiss, which was in use during the 16th to 19th centuries.^[12] The English adjective Swiss is a loan from French Suisse, also in use since the 16th century. The name Switzer is from the Alemannic Schwiizer, in origin an inhabitant of Schwyz and its associated territory, one of the Waldstätten cantons which formed the nucleus of the Old Swiss Confederacy. The toponym itself is first attested in 972, as Old High German Suittes, ultimately perhaps related to suedan "to burn", referring to the area of forest that was burned and cleared to build.^[13] The name was extended to the area dominated by the canton, and after the Swabian War of 1499 gradually came to be used for the entire Confederation.^[14][15]

The Swiss German name of the country, Schwiiz, is homophonous to that of the canton and the settlement, but distinguished by the use of the definite article (d'Schwiiz for the Confederation,^[16] but simply Schwiiz for the canton and the town).^[17]

The New Latin name Confederatio Helvetica was introduced gradually after the formation of the federal state in 1848, harking back to the Napoleonic Helvetic Republic, appearing on coins from 1879, inscribed on the Federal Palace in 1902 and after 1948 used in the official seal.^[18] It is derived from the name of the Helvetii, a Gaulish tribe living on the Swiss plateau before the Roman era. Helvetia appears as a national personification of the Swiss confederacy in the 17th century, with a 1672 play by Johann Caspar Weissenbach.^[19]

History[link]

Switzerland has existed as a state in its present form since the adoption of the Swiss Federal Constitution in 1848. The precursors of Switzerland established a protective alliance at the end of the 13th century (1291), forming a loose confederation of states which persisted for centuries.

Early history[link]

The oldest traces of hominid existence in Switzerland date back about 150,000 years.^[20] The oldest known farming settlements in Switzerland, which were found at Gächlingen, have been dated to around 5300 BC.^[20]

Founded in 44 BC, Augusta Raurica was the first Roman settlement on the Rhine and is now amongst the most important archaeological sites in Switzerland.^[21]

The earliest known cultural tribes of the area were members of the Hallstatt and La Tène cultures, named after the archaeological site of La Tène on the north side of Lake Neuchâtel. La Tène culture developed and flourished during the late Iron Age from around 450 BC,^[20] possibly under some influence from the Greek and Etruscan civilisations. One of the most important tribal groups in the Swiss region was the Helvetii. In 58 BC, at the Battle of Bibracte, Julius Caesar's armies defeated the Helvetii.^[20] In 15 BC, Tiberius, who was destined to be the second Roman emperor and his brother, Drusus, conquered the Alps, integrating them into the Roman Empire. The area occupied by the Helvetii—the namesakes of the later Confoederatio Helvetica—first became part of Rome's Gallia Belgica province and then of its Germania Superior province, while the eastern portion of modern Switzerland was integrated into the Roman province of Raetia.

In the Early Middle Ages, from the 4th century, the western extent of modern-day Switzerland was part of the territory of the Kings of the Burgundians. The Alemanni settled the Swiss plateau in the 5th century and the valleys of the Alps in the 8th century, forming Alemannia. Modern-day Switzerland was therefore then divided between the kingdoms of Alemannia and Burgundy.^[20] The entire region became part of the expanding Frankish Empire in the 6th century, following Clovis I's victory over the Alemanni at Tolbiac in 504 AD, and later Frankish domination of the Burgundians.^[22][23]

Throughout the rest of the 6th, 7th and 8th centuries the Swiss regions continued under Frankish hegemony (Merovingian and Carolingian dynasties). But after its extension under Charlemagne, the Frankish empire was divided by the Treaty of Verdun in 843.^[20] The territories of present day Switzerland became divided into Middle Francia and East Francia until they were reunified under the Holy Roman Empire around 1000 AD.^[20]

By 1200, the Swiss plateau comprised the dominions of the houses of Savoy, Zähringer, Habsburg and Kyburg.^[20] Some regions (Uri, Schwyz, Unterwalden, later known as Waldstätten) were accorded the Imperial immediacy to grant the empire direct control over the mountain passes. When the Kyburg dynasty fell in 1264 AD, the Habsburgs under King Rudolph I (Holy Roman Emperor in 1273) extended their territory to the eastern Swiss plateau.^[22]

Old Swiss Confederacy[link]

Federal charter of 1291

The Old Swiss Confederacy was an alliance among the valley communities of the central Alps. The Confederacy facilitated management of common interests (free trade) and ensured peace on the important mountain trade routes. The Federal Charter of 1291 agreed between the rural communes of Uri, Schwyz, and Unterwalden is considered the confederacy's founding document, even though similar alliances are likely to have existed decades earlier.^[24][25]

The Old Swiss Confederacy from 1291 (dark grey) to the sixteenth century (light grey) and its associates (blue)

By 1353, the three original cantons had joined with the cantons of Glarus and Zug and the Lucerne, Zurich and Bern city states to form the "Old Confederacy" of eight states that existed until the end of the 15th century. The expansion led to increased power and wealth for the federation.^[25] By 1460, the confederates controlled most of the territory south and west of the Rhine to the Alps and the Jura mountains, particularly after victories against the Habsburgs (Battle of Sempach, Battle of Näfels), over Charles the Bold of Burgundy during the 1470s, and the success of the Swiss mercenaries. The Swiss victory in the Swabian War against the Swabian League of Emperor Maximilian I in 1499 amounted to de facto independence within the Holy Roman Empire.^[25]

The Old Swiss Confederacy had acquired a reputation of invincibility during these earlier wars, but expansion of the federation suffered a setback in 1515 with the Swiss defeat in the Battle of Marignano. This ended the so-called "heroic" epoch of Swiss history.^[25] The success of Zwingli's Reformation in some cantons led to inter-cantonal religious conflicts in 1529 and 1531 (Wars of Kappel). It was not until more than one hundred years after these internal wars that, in 1648, under the Peace of Westphalia, European countries recognized Switzerland's independence from the Holy Roman Empire and its neutrality.^[22][23]

During the Early Modern period of Swiss history, the growing authoritarianism of the patriciate families combined with a financial crisis in the wake of the Thirty Years' War led to the Swiss peasant war of 1653. In the background to this struggle, the conflict between Catholic and Protestant cantons persisted, erupting in further violence at the Battles of Villmergen in 1656 and 1712.^[25]

Napoleonic era[link]

The Act of Mediation was Napoleon's attempt at a compromise between the Ancien Régime and a Republic.

In 1798, the revolutionary French government conquered Switzerland and imposed a new unified constitution.^[25] This centralised the government of the country and effectively abolished the cantons and Mülhausen and Valtellina valley separated from Switzerland. The new regime, known as the Helvetic Republic, was highly unpopular. It had been imposed by a foreign invading army and destroyed centuries of tradition, making Switzerland nothing more than a French satellite state. The fierce French suppression of the Nidwalden Revolt in September 1798 was an example of the oppressive presence of the French Army and the local population's resistance to the occupation.

When war broke out between France and its rivals, Russian and Austrian forces invaded Switzerland. The Swiss refused to fight alongside the French in the name of the Helvetic Republic. In 1803 Napoleon organised a meeting of the leading Swiss politicians from both sides in Paris. The result was the Act of Mediation which largely restored Swiss autonomy and introduced a Confederation of 19 cantons.^[25] Henceforth much of Swiss politics would concern balancing the cantons' tradition of self-rule with the need for a central government.

In 1815 the Congress of Vienna fully re-established Swiss independence and the European powers agreed to permanently recognise Swiss neutrality.^[22][23][25] Swiss troops still served foreign governments until 1860 when they fought in the Siege of Gaeta. The treaty also allowed Switzerland to increase its territory, with the admission of the cantons of Valais, Neuchâtel and Geneva. Switzerland's borders have not changed since.^[26]

Federal state[link]

The first Federal Palace in Bern (1857). One of the three cantons presiding over the Tagsatzung (former legislative and executive council), Bern was chosen as the federal capital in 1848, mainly because of its closeness to the French speaking area.^[27]

The restoration of the power to the patriciate was only temporary. After a period of unrest with repeated violent clashes such as the Züriputsch of 1839, civil war broke out in 1847 when some of the Catholic cantons tried to set up a separate alliance (the Sonderbundskrieg).^[25] The war lasted for less than a month, causing fewer than 100 casualties, most of which were through friendly fire. However minor the Sonderbundskrieg seems to be when compared with other European riots and wars in the 19th century, it nevertheless had a major impact on both the psychology and the society of the Swiss and of Switzerland.

The war convinced most Swiss of the need for unity and strength towards its European neighbours. Swiss people from all strata of society, whether Catholic, Protestant, or from the liberal or conservative current, realised that the cantons would profit more if their economic and religious interests were merged.

Thus, while the rest of Europe was plagued by revolutionary uprisings, the Swiss drew up a constitution which provided for a federal layout, much of it inspired by the American example. This constitution provided for a central authority while leaving the cantons the right to self-government on local issues. Giving credit to those who favoured the power of the cantons (the Sonderbund Kantone), the national assembly was divided between an upper house (the Swiss Council of States, 2 representatives per canton) and a lower house (the National Council of Switzerland, representatives elected from across the country). Referenda were made mandatory for any amendment of this constitution.^[23]

Inauguration in 1882 of the Gotthard Rail Tunnel connecting the southern canton of Ticino, the longest in the world at the time.^[28]

A system of single weights and measures was introduced and in 1850 the Swiss franc became the Swiss single currency. Article 11 of the constitution forbade sending troops to serve abroad, though the Swiss were still obliged to serve Francis II of the Two Sicilies with Swiss Guards present at the Siege of Gaeta in 1860, marking the end of foreign service.

An important clause of the constitution was that it could be re-written completely if this was deemed necessary, thus enabling it to evolve as a whole rather than being modified one amendment at a time.^[29]

This need soon proved itself when the rise in population and the Industrial Revolution that followed led to calls to modify the constitution accordingly. An early draft was rejected by the population in 1872 but modifications led to its acceptance in 1874.^[25] It introduced the facultative referendum for laws at the federal level. It also established federal responsibility for defense, trade, and legal matters.

In 1891, the constitution was revised with unusually strong elements of direct democracy, which remain unique even today.^[25]

Modern history[link]

General Ulrich Wille, Commander-in-Chief of the Swiss Army during World War I

Switzerland was not invaded during either of the world wars. During World War I, Switzerland was home to Vladimir Illych Ulyanov (Lenin) and he remained there until 1917.^[30] Swiss neutrality was seriously questioned by the Grimm-Hoffmann Affair in 1917, but it was short-lived. In 1920, Switzerland joined the League of Nations, which was based in Geneva, on the condition that it was exempt from any military requirements.

During World War II, detailed invasion plans were drawn up by the Germans,^[31] but Switzerland was never attacked.^[25] Switzerland was able to remain independent through a combination of military deterrence, concessions to Germany, and good fortune as larger events during the war delayed an invasion.^[23][32] Under General Henri Guisan, a massive mobilisation of militia forces was ordered. The Swiss military strategy was changed from one of static defence at the borders to protect the economic heartland, to one of organised long-term attrition and withdrawal to strong, well-stockpiled positions high in the Alps known as the Reduit. Switzerland was an important base for espionage by both sides in the conflict and often mediated communications between the Axis and Allied powers.^[32]

Switzerland's trade was blockaded by both the Allies and by the Axis. Economic cooperation and extension of credit to the Third Reich varied according to the perceived likelihood of invasion and the availability of other trading partners. Concessions reached a peak after a crucial rail link through Vichy France was severed in 1942, leaving Switzerland completely surrounded by the Axis. Over the course of the war, Switzerland interned over 300,000 refugees^[33] and the International Red Cross, based in Geneva, played an important part during the conflict. Strict immigration and asylum policies as well as the financial relationships with Nazi Germany raised controversy, but not until the end of the 20th century.^[34] Even in the 21st century, some Swiss banks and entities still refused to surrender the assets obtained from victims of Nazi persecution.

During the war, the Swiss Air Force engaged aircraft of both sides, shooting down 11 intruding Luftwaffe planes in May and June 1940, then forcing down other intruders after a change of policy following threats from Germany. Over 100 Allied bombers and their crews were interned during the war. During 1944–45, Allied bombers mistakenly bombed a few places in Switzerland, among which were the cities of Schaffhausen, Basel and Zurich.^[32]

After the war, the Swiss government exported credits through the charitable fund known as the Schweizerspende and also donated to the Marshall Plan to help Europe's recovery, efforts that ultimately benefit the Swiss economy.^[35]

Women were granted the right to vote in the first Swiss cantons in 1959, at the federal level in 1971^[25][36] and, after resistance, in the last canton Appenzell Innerrhoden (one of only two remaining Landsgemeinde) in 1990. After suffrage at the federal level, women quickly rose in political significance, with the first woman on the seven member Federal Council executive being Elisabeth Kopp, who served from 1984–1989,^[25] and the first female president being Ruth Dreifuss in 1999.

In 2003, by granting the Swiss People's Party a second seat in the governing cabinet, the Parliament altered the coalition which had brought stability to Swiss politics since 1959.

Switzerland joined the Council of Europe in 1963.^[23] In 1979 areas from the canton of Bern attained independence from the Bernese, forming the new canton of Jura. On 18 April 1999 the Swiss population and the cantons voted in favour of a completely revised federal constitution.^[25]

In 2002 Switzerland became a full member of the United Nations, leaving the Vatican City as the last widely recognised state without full UN membership. Switzerland is a founding member of the EFTA, but is not a member of the European Economic Area. An application for membership in the European Union was sent in May 1992, but not advanced since the EEA was rejected in December 1992^[25] when Switzerland was the only country to launch a referendum on the EEA. There have since been several referenda on the EU issue; due to a mixed reaction from the population the membership application has been frozen. Nonetheless, Swiss law is gradually being adjusted to conform with that of the EU, and the government has signed a number of bilateral agreements with the European Union. Switzerland, together with Liechtenstein, has been completely surrounded by the EU since Austria's membership in 1995. On 5 June 2005, Swiss voters agreed by a 55% majority to join the Schengen treaty, a result that was regarded by EU commentators as a sign of support by Switzerland, a country that is traditionally perceived as independent and reluctant to enter supranational bodies.^[23]

Geography[link]

Physical map of Switzerland

Extending across the north and south side of the Alps, Switzerland encompasses a great diversity of landscapes and climates on a limited area of 41,285 square kilometres (15,940 sq mi).^[37] The population is about 7.9 million, resulting in an average population density of around 190 people per square kilometre (485/sq mi).^[37][38][39] The more mountainous southern half of the country is far more sparsely populated than the northern half.^[37] In the largest Canton of Graubünden, lying entirely in the Alps, population density falls to 27 /km² (70 /sq mi).

Contrasted landscapes between the Matterhorn area in the high Alps, the Sanetsch region and the plateau at Lake Lucerne

Switzerland lies between latitudes 45° and 48° N, and longitudes 5° and 11° E. It contains three basic topographical areas: the Swiss Alps to the south, the Swiss plateau or middleland, and the Jura mountains on the north. The Alps are a high mountain range running across the central-south of the country, comprising about 60% of the country's total area. Among the high valleys of the Swiss Alps many glaciers are found, totalling an area of 1,063 square kilometres. From these originate the headwaters of several major rivers, such as the Rhine, Inn, Ticino and Rhone, which flow in the four cardinal directions into the whole of Europe. The hydrographic network includes several of the largest bodies of freshwater in Central and Western Europe, among which are included Lake Geneva, Lake Constance and Lake Maggiore. Switzerland has more than 1500 lakes, and contains 6% of Europe's stock of fresh water. Lakes and glaciers cover about 6% of the national territory.^[37][40][41]

About a hundred of Switzerland's mountain peaks are close to or higher than 4,000 metres (13,000 ft).^[42] At 4,634 m (15,203 ft), Monte Rosa is the highest, although the Matterhorn (4,478 m/14,692 ft) is probably the most famous. Both are located within the Pennine Alps in the canton of Valais. The section of the Bernese Alps above the deep glacial Lauterbrunnen valley, containing 72 waterfalls, is well known for the Jungfrau (4,158 m/13,642 ft) and Eiger, and the many picturesque valleys in the region. In the southeast the long Engadin Valley, encompassing the St. Moritz area in canton Graubünden, is also well known; the highest peak in the neighbouring Bernina Alps is Piz Bernina (4,049 m/13,284 ft).^[43]

The more populous northern part of the country, comprising about 30% of the country's total area, is called the Middle Land. It has greater open and hilly landscapes, partly forested, partly open pastures, usually with grazing herds, or vegetables and fruit fields, but it is still hilly. There are large lakes found here and the biggest Swiss cities are in this area of the country.^[43] The largest lake is Lake Geneva (also called Lac Léman in French), in western Switzerland. The Rhone River is both the main input and output of Lake Geneva.

Climate[link]

Contrasted climates between the most glaciated area in western Eurasia (Aletsch Glacier),^[44] the cold temperate Jura (Vallée de Joux) and the southern canton of Ticino (Lake Lugano)

The Swiss climate is generally temperate, but can vary greatly between the localities,^[45][46] from glacial conditions on the mountaintops to the often pleasant near Mediterranean climate at Switzerland's southern tip. Summers tend to be warm and humid at times with periodic rainfall so they are ideal for pastures and grazing. The less humid winters in the mountains may see long intervals of stable conditions for weeks, while the lower lands tend to suffer from inversion, during these periods, thus seeing no sun for weeks.

A weather phenomenon known as the föhn (with an identical effect to the chinook wind) can occur at all times of the year and is characterised by an unexpectedly warm wind, bringing air of very low relative humidity to the north of the Alps during rainfall periods on the southern face of the Alps. This works both ways across the alps but is more efficient if blowing from the south due to the steeper step for oncoming wind from the south. Valleys running south to north trigger the best effect. The driest conditions persist in all inner alpine valleys that receive less rain because arriving clouds lose a lot of their content while crossing the mountains before reaching these areas. Large alpine areas such as Graubünden remain drier than pre-alpine areas and as in the main valley of the Valais wine grapes are grown there.^[47]

The wettest conditions persist in the high Alps and in the Ticino canton which has much sun yet heavy bursts of rain from time to time.^[47] Precipitation tends to be spread moderately throughout the year with a peak in summer. Autumn is the driest season, winter receives less precipitation than summer, yet the weather patterns in Switzerland are not in a stable climate system and can be variable from year to year with no strict and predictable periods.

Environment[link]

Switzerland's ecosystems can be particularly fragile, because of the many delicate valleys separated by high mountains, often forming unique ecologies. The mountainous regions themselves are also vulnerable, with a rich range of plants not found at other altitudes, and experience some pressure from visitors and grazing. The climatic, geological and topographical conditions of the alpine region make for a very fragile ecosystem that is particularly sensitive to climate change.^[48][49]

Politics[link]

The Swiss Federal Council in 2012 with President Eveline Widmer-Schlumpf (in the middle)^{[note 5]}

The Federal Constitution adopted in 1848 is the legal foundation of the modern federal state. It is among the oldest constitutions in the world.^[50] A new Constitution was adopted in 1999, but did not introduce notable changes to the federal structure. It outlines basic and political rights of individuals and citizen participation in public affairs, divides the powers between the Confederation and the cantons and defines federal jurisdiction and authority. There are three main governing bodies on the federal level:^[51] the bicameral parliament (legislative), the Federal Council (executive) and the Federal Court (judicial).

The Federal Palace, seat of the Federal Assembly and the Federal Council.

The Swiss Parliament consists of two houses: the Council of States which has 46 representatives (two from each canton and one from each half-canton) who are elected under a system determined by each canton, and the National Council, which consists of 200 members who are elected under a system of proportional representation, depending on the population of each canton. Members of both houses serve for 4 years. When both houses are in joint session, they are known collectively as the Federal Assembly. Through referendums, citizens may challenge any law passed by parliament and through initiatives, introduce amendments to the federal constitution, thus making Switzerland a direct democracy.^[50]

The Federal Council constitutes the federal government, directs the federal administration and serves as collective Head of State. It is a collegial body of seven members, elected for a four-year mandate by the Federal Assembly which also exercises oversight over the Council. The President of the Confederation is elected by the Assembly from among the seven members, traditionally in rotation and for a one-year term; the President chairs the government and assumes representative functions. However, the president is a primus inter pares with no additional powers, and remains the head of a department within the administration.^[50]

The Swiss government has been a coalition of the four major political parties since 1959, each party having a number of seats that roughly reflects its share of electorate and representation in the federal parliament. The classic distribution of 2 CVP/PDC, 2 SPS/PSS, 2 FDP/PRD and 1 SVP/UDC as it stood from 1959 to 2003 was known as the "magic formula". In the 2007 Federal Council elections the seven seats in the Federal Council were distributed as follows:

2 Social Democrats (SPS/PSS),

2 Liberal Democrats (FDP/PRD),

2 Swiss People's Party (SVP/UDC),^{[note 6]}

1 Christian Democrats (CVP/PDC).

The function of the Federal Supreme Court is to hear appeals against rulings of cantonal or federal courts. The judges are elected by the Federal Assembly for six-year terms.^[52]

Direct democracy[link]

The Landsgemeinde is an old form of direct democracy. It is still practised in two cantons.^[53]

Swiss citizens are subject to three legal jurisdictions: the commune, canton and federal levels. The 1848 federal constitution defines a system of direct democracy (sometimes called half-direct or representative direct democracy since it is aided by the more commonplace institutions of a parliamentary democracy). The instruments of Swiss direct democracy at the federal level, known as civic rights (Volksrechte, droits civiques), include the right to submit a constitutional initiative and a referendum, both of which may overturn parliamentary decisions.^[50][54]

By calling a federal referendum a group of citizens may challenge a law that has been passed by Parliament, if they can gather 50,000 signatures against the law within 100 days. If so, a national vote is scheduled where voters decide by a simple majority whether to accept or reject the law. Eight cantons together can also call a referendum on a federal law.^[50]

Similarly, the federal constitutional initiative allows citizens to put a constitutional amendment to a national vote, if they can get 100,000 voters to sign the proposed amendment within 18 months.^{[note 7]} Parliament can supplement the proposed amendment with a counter-proposal, with voters having to indicate a preference on the ballot in case both proposals are accepted. Constitutional amendments, whether introduced by initiative or in Parliament, must be accepted by a double majority of both the national popular vote and a majority of the cantonal popular votes.^{[note 8][55][56][57]}

Administrative divisions[link]

The Swiss Confederation consists of 26 cantons:^[50]

Valais Ticino Graubünden (Grisons) Geneva Vaud Neuchâtel Jura Bern Thurgau Zurich Aargau Lucerne Solothurn Basel-Land Schaffhausen Uri Schwyz Glarus St. Gallen AI AR Obwalden Nidwalden Zug Fribourg Basel-Stadt France Italy Liecht. Austria Germany

Canton		Capital	Canton		Capital
	Aargau	Aarau		*Nidwalden	Stans
	*Appenzell Ausserrhoden	Herisau		*Obwalden	Sarnen
	*Appenzell Innerrhoden	Appenzell		Schaffhausen	Schaffhausen
	*Basel-Landschaft	Liestal		Schwyz	Schwyz
	*Basel-Stadt	Basel		Solothurn	Solothurn
	Bern	Bern		St. Gallen	St. Gallen
	Fribourg	Fribourg		Thurgau	Frauenfeld
	Geneva	Geneva		Ticino	Bellinzona
	Glarus	Glarus		Uri	Altdorf
	Graubünden	Chur		Valais	Sion
	Jura	Delémont		Vaud	Lausanne
	Lucerne	Lucerne		Zug	Zug
	Neuchâtel	Neuchâtel		Zurich	Zurich

*These half-cantons are represented by one councillor (instead of two) in the Council of States.

The cantons have a permanent constitutional status and, in comparison with the situation in other countries, a high degree of independence. Under the Federal Constitution, all 26 cantons are equal in status. Each canton has its own constitution, and its own parliament, government and courts.^[53] However, there are considerable differences between the individual cantons, most particularly in terms of population and geographical area. Their populations vary between 15,000 (Appenzell Innerrhoden) and 1,253,500 (Zurich), and their area between 37 km² (14 sq mi) (Basel-Stadt) and 7,105 km² (2,743 sq mi) (Graubünden). The Cantons comprise a total of 2,485 municipalities. Within Switzerland there are two enclaves: Büsingen belongs to Germany, Campione d'Italia belongs to Italy.^[58]

In a referendum held in the Austrian state of Vorarlberg on 11 May 1919 over 80% of those voting supported a proposal that the state should join the Swiss Confederation. However, this was prevented by the opposition of the Austrian Government, the Allies, Swiss liberals and non German-speaking Swiss.^[59][60]

Foreign relations and international institutions[link]

The Palace of Nations, the European headquarters of the United Nations in Geneva

Traditionally, Switzerland avoids alliances that might entail military, political, or direct economic action and had been neutral since the end of its expansion in 1515. Its policy of neutrality was internationally recognised at the Congress of Vienna in 1815.^[61][62] Only in 2002 did Switzerland become a full member of the United Nations^[61] and it was the first state to join it by referendum. Switzerland maintains diplomatic relations with almost all countries and historically has served as an intermediary between other states.^[61] Switzerland is not a member of the European Union; the Swiss people have consistently rejected membership since the early 1990s.^[61]

The monochromatically reversed Swiss flag became the symbol of the Red Cross Movement,^[36] founded in 1863 by Henri Dunant.^[63]

An unusual number of international institutions have their seats in Switzerland, in part because of its policy of neutrality. Geneva is the birth place of the Red Cross and Red Crescent Movement and the Geneva Conventions and, since 2006, hosts the United Nations Human Rights Council. Even though Switzerland is one of the most recent countries to have joined the United Nations, the Palace of Nations in Geneva is the second biggest centre for the United Nations after New York, and Switzerland was a founding member and home to the League of Nations.

Apart from the United Nations headquarters, the Swiss Confederation is host to many UN agencies, like the World Health Organization (WHO), the International Labour Organization (ILO), the International Telecommunication Union (ITU), the United Nations High Commissioner for Refugees (UNHCR) and about 200 other international organisations, including the World Trade Organization.^[61] The annual meetings of the World Economic Forum in Davos bring together top international business and political leaders from Switzerland and foreign countries to discuss important issues facing the world, including health and the environment.

Furthermore, many sport federations and organisations are located throughout the country, such as the International Basketball Federation, in Geneva, the UEFA (Union of European Football Associations), in Nyon, the FIFA (International Federation of Association Football) and the International Ice Hockey Federation, in Zurich, the International Cycling Union, in Aigle, and the International Olympic Committee, in Lausanne.^[64]