Battered image: Switzerland needs to go back to the drawing board

Disputed neutrality, a discredited financial centre and a lack of political vision: several pillars of Switzerland’s self-image are shaking. It is time the country did some serious self-reflection, writes Mark Pieth.  

The downfall of Credit Suisse brings back memories of the grounding of national carrier Swissair in 2001. There are parallels – above all the ignorance and obstinacy of the management – but the bank’s collapse is much more dramatic. It calls into question the very foundations of the Swiss financial centre, and with it a central prerequisite of our value-creation chain.   

Seasoned banker and businessman Konrad Hummler knows what he is talking about when he writesExternal link (in the Neue Zürcher Zeitung of March 18) that “the storm is not passing. It is racing towards Switzerland”. The demise of Credit Suisse is just one of the problems currently besetting the country. The Swiss have surely noticed that they are not particularly popular abroad, not least because their neighbours and competitors feel they are shirking their responsibilities, for instance regarding the sanctions against Russia.  

But crises are also an opportunity for reflection. Switzerland is an attractive business location. There is no denying, though, that official Switzerland likes to close its eyes to the risks. The challenges facing the financial sector with respect to money laundering, dictator funds and now oligarchs are all painfully familiar. 

It would be naïve, of course, to assume that a country could be the world’s largest commodity trading hub without taking risks. What is clearly lacking, though, is governance, to step in when Swiss-based companies and associations act in a way that can cause harm at home or abroad. A credible financial supervisory authority would presumably have been able to anticipate the Credit Suisse crash.  

The commodity markets, and with them the shipping companies, are not regulated at all. Official Switzerland seems hardly interested in the country’s market dominance in gold refining, nor in the art trade. And Switzerland’s exposure to scandal with its 60 international sports federations seems to be more the stuff of pub gossip than serious debate.    

Risk management is not the only issue that deserves more attention, however. In my view, Switzerland should go right back to the drawing board. The traditional reaction to international criticism is the old wagon-circle mentality – ever since the country’s creation, in 1291. It is high time Switzerland set about making friends. 

This does not mean that it should join the EU straight away. Yet the embarrassing way the country is managing its relations with the European bloc is part of the crisis scenario. Switzerland urgently needs to proactively approach like-minded states that care as much about democracy and the rule of law as it does – the Netherlands, Belgium, Sweden, Norway and Austria spring to mind, to mention but a few. 

Swiss business and politics urgently need to become more creative – and preferably, to put it quite bluntly, with other leaders at the helm than those who got us into this mess in the first place. 

Switzerland’s global image hits a low 

The near collapse of the 167-year-old bank Credit Suisse set off a financial earthquake that has made headlines far beyond Switzerland’s borders. Although the government’s crisis management was generally well received abroad, the reputation of the Swiss financial centre has suffered a blow – and with it Switzerland’s entire image, which was already starting to tarnish.  

The country has been facing criticism for some time. Since the Russian invasion of Ukraine, its neutrality has been contested internationally. Russia no longer regards Switzerland as neutral, while its Western partners see it as opportunistically sitting on the fence and accuse it of harming Ukraine. The Swiss authorities’ ban on the re-export of military equipment to Ukraine has raised doubts as to whether Switzerland is still a reliable ally at all. The criticism also covers the sanctions against Russian oligarchs. In the eyes of many international observers, Switzerland is not going far enough.  

Neutrality, the banking centre and the sanctions policy: these matters go to the very heart of the country’s identity. We asked various prominent Swiss figures how they see Switzerland’s reputation in the world today and what they think should be done.

The views expressed in this article are solely those of the author, and do not necessarily reflect the views of SWI swissinfo.ch. 

Edited by Marc Leutenegger. Translated from German by Julia Bassam.