Why Switzerland Is Not a Member of EU?

Switzerland is not a member of the European Union and is one of the few Western European countries opposed to joining the EU. The Alpine state, which borders on all sides with the EU countries, is called by many a lonely island in the middle of Europe. And this is a pretty accurate statement because the Swiss government is defending its sovereignty and democracy in every possible way.

At the same time, there are several paradoxes of such an independent position:

•  almost ¼ of the Swiss population are foreigners, including those from the European Union
•  the country’s economy is largely dependent on exports, where the main trading partner is the EU
• Geneva has become home to several UN organizations, but Switzerland agreed to join the United Nations only in 2002.

Why is Switzerland not in the EU? To understand this issue, we need to carefully study the history of the state and its political and economic views and traditions.

Reasons why Switzerland is not an EU member

Switzerland remains one of the Western European countries whose government and people do not plan to join the European Union. There are several reasons for this, among which the priority is the jurisdiction’s independence and its democratic doctrines.

Historical, political, and military neutrality

The first reason why Switzerland does not want to join the European Union is the historical neutrality of this state. Switzerland has adhered to this position for centuries, including in European wars and conflicts. And it contributed to the economic balance and security of the state for many decades.

At the end of the 19th century, Switzerland implemented a strong geopolitical doctrine of armed neutrality that survived two world wars and is still in effect nowadays. After joining the EU, Switzerland would have to follow this organization’s foreign policy and strategies, which would destroy the country’s status as an international arbiter and supporter of peace negotiations.

Stable economic environment

The Swiss economy is quite solid and prospering despite the sanctions and the global crisis. The country is among the richest and most developed in the world. Switzerland is one of the few countries that survived the crises after the Covid pandemic and the events in Ukraine without falling into a recession in 2022.

For example:

• The average inflation rate in the Eurozone in 2022 was 10.1%.
• The Swiss franc maintains its reputation as one of the most stable currencies in the world, with the country’s inflation rate hovering at 2.83%.

For less developed countries, integration into the European Economic Area and inclusion in the EU market are indeed beneficial steps. But in the case of Switzerland, such a move could be very risky.

Institutional differences between Switzerland and EU member states

The two main differences between Switzerland and the EU countries are institutional:

• Switzerland has a federal structure adopted since the constitution of 1848. The Swiss Federation is distinguished from the rest of Europe by its strong system of checks and balances and decentralized power. For example, the entire state is divided into cantons, each of which is an independent entity with its own local constitution, government, and police. At the same time, the federal authorities can make decisions only on cases of two or more cantons within the framework of strict subsidiarity.
• The policy of European states is directly opposite. It contains two options for political power:
  • A completely centralized system of governing the country and its individual regions under a single government (for example, Italy, France).
  • A federal structure where the central government makes most non-administrative decisions (e.g., Germany).

And this is a serious reason why the Swiss authorities and its people have not decided to join the European Union.

Democracy

And one more point that distinguishes Switzerland from the EU member states is the institution of direct democracy. All decisions are made by the people, who can approve or repeal the government’s laws in referendums or by providing the signatures of the canton’s inhabitants’ majority.

Under the current legal status of EU law, Switzerland’s accession to the Union would mean a sharp decline in the country’s democracy level. As a result, the government would have to work and govern on an EU-like basis, which means transforming the entire system into binding guidelines to be followed through the federal government.

This option runs counter to the mentality and traditions of Swiss politics. In the case of joining the EU, the country will lose its sovereignty as a democratic state and will be forced to apply the European way of governance.

The banking sector as a safe haven

Another not obvious but significant reasons that indirectly affect Switzerland’s refusal to join the EU member states: the financial sector and the security of bank accounts. Of course, nowadays, it is impossible to count on complete confidentiality, but due to the country’s laws on banking secrecy, the level of bank accounts’ security and privacy in Switzerland remains at a high level.

At the same time, the country’s authorities have adopted rules for the automatic exchange of tax information with hundreds of states and have maintained friendly relations with the US Internal Revenue Service, which requires providing information about their residents under FATCA. However, this did not significantly shake the rating of Swiss banks, which are chosen as a place to store their assets by millionaires and large companies.

Have there been any attempts by Switzerland to join the EU?

Yes, there have been attempts to join the EU countries more than once. But Switzerland has a reasonably well-developed neutrality, the concept of which is rooted in the minds of the local population. This, together with the country’s democratic doctrine, was a sufficient reason not to become a member of the European Union at the end of the last century.

In chronological order, Switzerland’s attempts to join the EU are as follows:

• 1992 – 50.3% of the vote against the country’s accession to the European Union, which consisted of only 12 countries at that time. The main argument is undermining the state’s democracy when the main decisions will be made not in Bern but in Brussels.
•  2001 – 77% of Swiss citizens voted against the initiative to start negotiations on EU membership.
•  The Swiss government then gradually entered into 120 bilateral agreements with Brussels, which include:
  • market access for Swiss exports
  • issues of scientific research and student exchanges
  • police cooperation between the European Union zone and Switzerland
  • belonging to the Schengen area, which provides for the free and unrestricted movement of people between member states.
• 2020 – a survey of Swiss residents showed that only 7% of the total respondents’ number favored the country’s accession to the EU.
• 2021 – a conflict was brewing between Switzerland and the EU as part of the negotiations on a framework agreement. The Swiss authorities demanded to revise five points (agreements) and finalize the applicable laws, which they did not receive approval from the EU leadership.
• 2022 – Switzerland’s EU accession plan is presented by the leaders of the Socialist Party.

Recall that Switzerland is a member of the Schengen area, where there is no border control. This opens up many opportunities for the state’s residents – access to the European market and freedom of sovereignty. Switzerland is also part of the European Free Trade Association (EFTA), which provides the country with access to selected trade and economic incentives.

Is it likely that Switzerland will join the EU in the foreseeable future?

If you are wondering if Switzerland is in the European Union or plans to do so in the near future, the answer is no. The number of Swiss citizens wishing to become one with the EU countries is minimal. The state and its citizens do not plan to part with the usual canons of life and the rule of law, despite the proposals of some minority party leaders.

If, in 2020, only 7% of respondents favored Switzerland joining the EU, then in 2023, according to global and Swiss analysts, the situation will not be radically different. With a high degree of probability, the majority of state residents will vote against joining the European Union.