Europe's identities, this book argues, exist in the plural. There is no one European identity, just as there is no one Europe. These identities can be conceived as both social process and political project. Understood as process, identities flow through multiple networks and create new patterns of identification. Viewed as project, the construction of identities is the task of elites and entrepreneurs, operating in Brussels or various national settings.

Process and project involve publics and elites; they are shaped by and shape states; they are open-ended and have no preordained outcomes; and they serve both worthy and nefarious political objectives. Bureaucrats crafting a Europe centered on Brussels, xenophobic nationalists, cosmopolitan Europeanists, anti-globalization Euro-skeptics, and a European public that for decades has been permissive of the evolution of a European polity – they are all politically involved in the construction of an evolving European identity.

Following the 2004 and 2007 enlargements, a politically cohesive Western Europe centered on the European Union (EU) is receding, while a politically looser and more encompassing Europe is rising. Europe is no longer what it was during the Cold War, an integral part of an anti-communist alliance. In the wake of 9/11, for many in Western Europe, Europe now represents an alternative to American unilateralism and militarism. For Central and Eastern European states seeking to build their own democratic and capitalist futures, Europe has become both a place of return and an inescapable destination.

Introduction

Although Switzerland is at the heart of Europe, the country resembles a tiny island on the political map of Europe, surrounded by the twenty-seven member states of the European Union. In chapter 2 we argued that recent domestic and international developments have altered Switzerland's renowned political-island status. However, its outsider position in EU politics, due to its formal non-membership, prevents the country from full political integration. As we shall see in this chapter, solutions have nonetheless been found that allow Switzerland to deal with the challenges imposed by European integration.

We commence this chapter by providing a historical overview of the relations between the European Union and Switzerland. Structured in four stages, this overview is followed by a discussion of the prospects for eventual EU accession. We will conclude this chapter by arguing that Switzerland's current and probable future relationship with the EU can best be characterized as a ‘customized quasi-membership’.

Historical overview

The historical outline of Switzerland's relationship with the European Community (EC), and later with the EU, can be structured in four, consecutive stages: initial multilateral failures, stagnation, further multilateral failure and enhanced unilateral and bilateral integration.

Stage one: initial multilateral failures (1955–72)

The developments leading to the Treaties of Rome, which created the European Economic Community (EEC; now known simply as the European Community or EC) and the European Atomic Energy Community (EURATOM) in 1957, demanded a Swiss reaction in order to avoid the country's isolation.

Introduction

Swiss interest associations have traditionally been very important actors in Swiss politics. Their powerful position contrasts with the weakness of Swiss political parties. Interest associations have been more coherently structured and more resourceful than parties and they have traditionally played a key role in the legislative process in the pre-parliamentary arena as well as in policy implementation. Switzerland has therefore often been considered as a paradigmatic case of democratic corporatism. Thus, Peter Katzenstein (1985), who analysed how the small Western European countries met the challenge of their integration into global markets, counted Switzerland among the typical cases of ‘democratic corporatism’. Three elements characterized this kind of regime: a centralized and concentrated system of interest associations; a voluntary and informal coordination of the various interests in continuous political negotiations between their associations, political parties and the various branches of public administration; and an ideology favouring social partnership. Based on the configuration of power in the system of interest intermediation, Katzenstein distinguished between two versions of ‘democratic corporatism’ – a liberal and a social version. In the social version, typically represented by Sweden, a strong labour movement was capable of matching the power of the business community. In the liberal version, for which Switzerland represented the typical case, power was asymmetrically distributed between a dominant business community and a rather weak labour movement.

Introduction

Switzerland has a longstanding global reputation as an economic success story, but also as a special case (OECD 2006: 20). The reasons for this success are not obvious, but they are usually attributed to a combination of factors including openness to international trade and investment, a flexible labour market (see chapter 7), a sound monetary policy, a highly developed financial sector, a strong record of innovation, a high level of human capital development, and a unique system of government which we have described in the previous chapters. However, since the 1990s, economic liberalization on a worldwide scale has put the traditional Swiss model of adjustment under pressure. Unleashed by a series of changes in the American economy, Western Europe in general and Switzerland in particular have been put under increasing pressure. Liberalization means the introduction or reinforcement of market competition which goes hand in hand with an often dramatic erosion of different forms of traditional privileges. According to Schwartz (2001), ‘liberalization’ means, above all, the erosion of politically guaranteed property rights and the income streams associated with them. Liberalization therefore especially concerns individuals and firms in the sectors that have been protected against competition by state intervention since the 1920s. While liberalization implies the introduction of greater market competition, it does not necessarily imply deregulation, i.e. the reduction or elimination of regulation; in fact, in most cases, liberalization goes together with re-regulation, i.e. the reformulation of old rules or the introduction of new ones.

Introduction

In his classic study, Esping-Andersen (1990) distinguishes between three ideal-typical worlds of welfare – a social-democratic, a liberal and a conservative welfare state. The social-democratic welfare state, typically represented by Scandinavian countries, is a generous, universalistic one that provides social security to all irrespective of gender, former employment status or nationality. Moreover, social services are provided by the state itself, which implies a large amount of public employment. The liberal welfare state, exemplified by the United States, is a residual welfare state of limited size which essentially constitutes the last resort for people in need, providing not much more than a minimal level of benefit. Social security over and above the basic safety net is left to individual initiative. Like the social-democratic model, the conservative or Christian-democratic welfare state, exemplified by the ‘Bismarckian’ or German model, is an onerous one. But it implies less public employment than the social-democratic model and mainly provides massive transfer payments with the aim of maintaining the social status which the beneficiaries have acquired during the period of active employment. Moreover, the conservative welfare state is oriented towards the maintenance of the family with one (typically male) breadwinner.

The Swiss welfare state has proved notoriously difficult to classify by reference to this threefold classification. Esping-Andersen himself considers it a liberal regime, while others refer to it as a Christian-democratic welfare state (Scharpf and Schmidt 2001; Huber and Stephens 2001), a ‘Western European welfare state with a liberal face’ (Armingeon 2001: 162), a mixed regime (Obinger 1998) or as a case of a welfare state ‘disciplined by Protestantism’ (Manow 2002).

Despite Switzerland's small size, the Swiss political system is in many respects one of the most complex and fascinating among contemporary western democracies. It not only builds upon historical developments that started centuries ago, but the unique structure of its society, the richness of its political institutions, its complex political arrangements and the multifaceted pressures for reform constitute a laboratory for any scholar in the social sciences. Often presented as the paradigmatic case of political integration, consensus democracy, multinational federalism and direct-democratic decision making, the Swiss political system has become a benchmark case for analyses in comparative politics, political behaviour, European studies and related fields.

Surprisingly, however, social scientists and policy experts outside Switzerland rarely include the Swiss case in their comparative work. This is in large part due to the still (quantitatively) meagre research output published in English and the limited availability of data and sources on the Swiss political system. Of course, these two shortcomings interact and create a vicious circle. With the present introduction to Swiss politics, we hope to take a step towards bringing Switzerland into the mainstream of comparative work.

The present volume starts out with the development of the modern state and focuses on the process of state formation within the federalist framework. In addition, the introductory chapter discusses the ambiguous concepts of Swiss nationhood and Swiss political culture. Chapters 2 to 5 introduce the Swiss polity, the structures and institutions of the Swiss political regime.

The institutions of direct democracy

This chapter deals with the third and in many ways most crucial institution of the Swiss political system: direct democracy. The instruments of direct democracy are not exclusive to the Swiss, in fact an ever growing number of democratic regimes use the referendum device and forms of popular initiatives (Butler and Ranney 1994; Gallagher and Uleri 1996; Budge 1996; Mendelsohn and Parkin 2001). However, nowhere are these more developed than in Switzerland. A comparative glimpse at the (numeric) importance of direct democracy at the national level reveals that Switzerland comes first among all 47 Council of Europe member states (Schmitter and Trechsel 2004: 80). Between 1960 and 2003, a total of 321 referendums were held at the national level in Switzerland. This exceeds by a factor of six the total of those coming second and third on this list, i.e. Liechtenstein (58 referendums) and Italy (57). Also, and unlike anywhere else, the Swiss institutions of direct democracy embody a truly system-formative device, greatly impacting on party competition, government, Parliament, the legislative process and policy making at all levels of the federal state.

Well before the creation of the federal state in 1848, various forms of direct-democratic institutions existed at the cantonal and municipal levels. Although early forms of local democracy go back as far as the twelfth century, it was primarily through the reception of ideas stemming from the French Revolution that direct democracy was extended, modernized and institutionalized at the cantonal level (Kölz 1992).

The gradual consolidation

We now turn to federalism, yet another fundamental institution that underpins the Swiss political system. As discussed in chapter 1, Switzerland's modern federal state was created in 1848 following the two consecutive collapses of the former Confederation. Similar to the transition from the Articles of Confederation to the Federal Constitution of the United States in 1787, the transition from the Confederation to the federal state in Switzerland was revolutionary in the sense that it abolished the unanimity principle and replaced it by a system of qualified majority for amending the supreme law. In both cases, this ‘federalist deficit’ – the unanimity principle for constitutional change – could therefore be overcome (Trechsel 2005). However, in 1848, the federal level of government in the newly created state was extremely weak, as the cantons were able to preserve significant parts of their power. According to Stepan (1999), Switzerland – together with the United States and Australia – fits into the category of ‘coming together’ federalism, where the creation of the federal state is based on a largely voluntary agreement. The creation of the Swiss federal state is based on the logic of relatively autonomous units that ‘come together to pool their sovereignty while retaining their individual identities’ (Stepan 1999: 23).

Introduction

The presentation of the party system allows us to get a first idea of the political forces that determine Swiss politics. In a comparative perspective, three characteristics of the Swiss party system have long been salient – its fragmentation, its relative stability and its domination by parties of the moderate right. As Kerr (1987: 123) observed, the ‘dispersion of political power finds its fullest expression in a highly fragmented party system’. The fragmentation has been typical for the system as a whole as well as for each party taken separately. It has its origin in the large number of social and cultural cleavages, in the federal structure of the Swiss state and in the effects of the electoral system. Political stability is a result of the integrative force of the institutional framework and of the consensual political culture. Switzerland has long provided one of the main examples for Lipset and Rokkan's (1967) ‘freezing hypothesis’, according to which contemporary party systems still reflect the cleavage structure of the European societies at the end of World War I. The traditional weakness of the Swiss left and the domination by parties from the moderate right can at least in part be explained historically by the cultural dividedness, the early industrialization and the early democratization of the country (Bartolini 2000). However, as we will show in this chapter, in the course of the 1990s, the Swiss party system started to change and its volatility increased – with profound effects on the configuration of power in Swiss politics.

Introduction

This chapter provides an overview of the Swiss system of government and its two branches, the legislative and the executive. We will first present the structure and functioning of the Federal Parliament before having a closer look at the Federal Council, the executive body of the Confederation. This will be followed by a discussion of the relationship between the two and the current problems they are facing. We will conclude this chapter with an assessment of possible options for reforming the Swiss system of government.

The Federal Parliament

In chapter 3 the reader was provided with the most basic information concerning the set-up of the Federal Parliament. In this chapter we go further and present a more detailed picture of the Swiss Parliament's structure and role. The Federal Parliament is the highest authority of the Confederation, subject to the rights of the people and the cantons. In academic literature, a classic distinction is made between parliaments of work and parliaments of debate. While the latter could characterize the British House of Commons, where major political decisions are taken following plenary discussions, the Swiss Parliament clearly belongs to the first category: it is a parliament of work; the bulk of work is undertaken within committees, outside the plenary chamber (Linder 1999: 195; Ochsner 1987). Other chief examples of parliaments of work include the US Congress and the European Parliament. According to Lüthi (1987: 88), Swiss MPs spend more than 70 per cent of their time working for parliamentary committees.

State formation

Until the French Revolution, the Swiss Confederation remained no more than a loose alliance of thirteen cantons with strong ties to allied territories such as Geneva, Grisons or Valais, plus subject territories (e.g. Vaud, Argovia, Thurgovia, Ticino or Valtellina) of their component units or of the federation as a whole. The Confederation exercised only limited governmental capacity. The only stable institution that the Thirteen and their allies maintained was a permanent assembly of delegates – the Diet, which met regularly in order to discuss matters of common interest, especially of war and peace. Together with the ancient pact from the thirteenth century and some other agreements, the national peace treaties, concluded after the religious civil wars in the sixteenth and seventeenth centuries, constituted the fundamental law of the Confederation (Körner 1986: 398). Most importantly, in the first peace of Kappel in 1529, which had put a temporary end to the war between the cantons that had converted to the new Protestant creed and the cantons that remained Catholic, the belligerents had promised to no longer interfere in each other's religious affairs. The formula chosen already stated the principle of what would later become a ‘defensive’ kind of federalism. The second peace of Kappel confirmed the preceding formula in 1531: each camp promised to respect the religious choices made by the other one.