Key Challenges

Disconnect between
Swiss identity, reality
At the close of this review period, Switzerland continued to face ongoing, interrelated challenges. There remains a disconnect between Swiss identity and reality: a vast share of the population is comprised of foreign workers and other migrants. Policymakers are struggling to implement popular referendums, navigating between “responsive” (i.e., implementing voters’ preferences) and “responsible” (i.e., furthering the common good under conditions of constrained choices) execution. They must also reform the pension system and find sustainable solutions for the country’s relationship with the EU. Finally, the push for ecological reforms has become strong and is changing political discourse and the distribution of political power.
Relationship with EU increasingly fragile
First, the country’s relationship with the EU remains provisional and increasingly fragile. In the past, the realities of domestic politics made bilateral agreements the only practical solution as neither a policy of “going it alone” nor EU membership were feasible strategies. However, this bilateral solution is becoming increasingly untenable. While domestic conflicts about the future relationship between the EU and Switzerland have not abated, solutions have to be found. The strategy of muddling through, while currently successful, will eventually become unsustainable. An institutional framework agreement with the EU appears unavoidable, though there are no political majorities for such an agreement. Fashioning compromises that are compatible with EU rules and the need to craft domestic majorities depends on the skills of politicians and representatives of major interest groups. At the time of this writing, there are no such compromises in sight, and any such compromise will likely be put up for discussion in the fall of 2020 at the earliest.
Conflicts over migration intensifying; strong right-wing populist party in government
Second, minimizing internal political conflicts fueled by migration has grown more challenging. The share of foreigners within Switzerland’s population is among the highest in the world. Immigration has stimulated economic growth. To sustain the high economic growth rate, it remains essential that the country continues to recruit highly skilled labor. An extraordinarily high proportion of elite positions in the economy and higher education are staffed by foreign workers. Foreigners are also younger than the average Swiss citizen. Consequently, they contribute far more to the Swiss pension system than they receive. Hence, they subsidize the Swiss pension system and contribute significantly to its sustainability. Nonetheless, immigration has prompted considerable concerns among the Swiss working- and middle-class about housing prices, jobs, the use of infrastructure (e.g., roads and public transportation) and national identity. Swiss workers constitute the base of the right-wing populist Swiss People’s Party (SVP). Today, the SVP is among the strongest right-wing populist parties in Europe in terms of votes, representation in government and success in referendums. Notably, this political strength cannot be primarily attributed to xenophobia. At least in international comparison, Switzerland and some of the Nordic countries show a relatively low level of xenophobia. Even so, the SVP has been extremely successful in mobilizing xenophobic elements within the population. Nonetheless, the results of the recent general election suggest that the rise of right-wing populist movements in Switzerland have reached a limit of sorts.
More initiatives
incompletely imple-mented; balancing “people’s will,”
global norms
Another challenge in recent years is the growing number of popular initiatives that have been approved by voters but which have been either only partially implemented or not at all. This failure to implement constitutional amendments derived from popular initiatives is not entirely new. Historical examples of provisions left unimplemented include the prohibition on absinth (1908) and ban on gambling houses (1920 – 1921). Notwithstanding, these precedents are few and the promoters of these initiatives were not in the political center. By contrast, the number of successful nativist-driven initiatives has grown in recent years and their advocates (e.g., SVP and related organizations) are politically powerful. Several recent initiatives remain only partially implemented because full implementation would violate international law, international treaties or economic norms. This has put the administration in a difficult position: full implementation would violate international or economic norms, but partial implementation gives rise to accusations among right-wing politicians that the “will of the people” is not respected. In order to mitigate the conflict between “responsive” and “responsible” government, political elites must effectively communicate that the Swiss nation – as all consolidated democracies – is at best semi-sovereign and that there are strict limitations on what the public can decide upon. Such a communication strategy, however, would clash with the self-image of the Swiss, who are immensely proud of their (perceived) independence and sovereignty.
Aging population
stressing pension system
As in most other mature democracies, Switzerland’s pension system must cope with the challenges posed by an aging population. To date, the system has been sustainable and provides relatively generous pension payments. Nonetheless, without exceptionally strong productivity growth or a continuing inflow of young foreign labor, in the long run, the retirement age or tax revenue and pension contributions must be raised or the level of benefits reduced. Far-reaching reform attempts have failed in past years and have been replaced by short-term and very limited solutions that may result in major costs for future generations. It remains to be seen as to whether this policy of muddling through and short-term compromises will bring any sound results in the long run.

Party Polarization

Polarization making reforms difficult; striking shift to left in parliament
Party polarization has increased since the early 1990s. Major reform processes – in particular with regard to adaptation to external constraints – have been stalled or made very difficult as a consequence of party polarization. The results of the national election of October 2019 did not change much in the total share of the polar parties (Swiss People’s Party and Lega on the right; Social Democrats, Greens and the Swiss Party of Labour on the left) in the National Council (123 of 200 seats). However there was a considerable shift to the left, which achieved in 2019 35% of parliamentary seats in the National Council as compared to 28% in 2015, while the right went from holding 34% of seats in the National Council in 2015 to only 27% of seats in 2019. Given the high stability of Swiss politics, this marked an extraordinary change. (Score: 4)
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