see also: United Nations member states - Switzerland

The traditionally stable Swiss governmental system rests on consensus, direct democracy, and federalism. Switzerland is one of the wealthiest countries in the world as a result of its finance industry. The service sector has also come to play a significant economic role. Relations with the European Union are close, but Switzerland continues to reject membership, as it does not want to compromise its traditional policy of neutrality.

Economic Boom and Criticism after World War II
 

Switzerland experienced a rapid rise in its economy after World War II. The conduct of the banks cooperating with the Nazis during the war became the subject of sharp criticism.

1 As a neutral state, Switzerland dissolved its extremist left- and right-wing political parties and was not an active participant in World War II although it was obliged to have commercial relations with the Axis Powers. Its production facilities remained to a great extent undamaged.

This facilitated the country's swift 2, 4 economic resurgence after the war.

Switzerland has achieved one of the highest per capita incomes in the world, with low unemployment and a low budget deficit.

The service sector has grown to play an increasingly large role; its main business sectors are banking and insurance as well as 5, 6 tourism.

Switzerland preserved its strict neutrality, remaining outside the United Nations (until 2002) and the North Atlantic Treaty Organization, although it did decide to join the European Organization for Cooperation and Development.

As a 3 financial center, Switzerland—which owes its leading position to the combination of strict banking confidentiality, the neutrality of the country, and the security of its "Swiss numbered accounts"—came under criticism after the end of the war.

The Nazis had moved a major part of the valuables they had stolen during their time in power to Switzerland, and Swiss banks profited greatly from their crimes. In 1946, the remaining German assets were transferred to the Allies for reparations. Treaties with Poland and Hungary in 1949 resulted in the return of assets to the heirs of victims there. In 1962, a law was passed to force the banks to provide information on and pay out the remaining fortunes of those persecuted by the Nazi regime. In 1995 Switzerland was once again accused of having profited from the smuggling of stolen goods. In response, the Swiss government set up an international commission of experts to investigate, but foreign pressure increased to the point that a payment was agreed upon before the investigation was completed. Despite this process, the conduct of the banks had damaged Switzerland's reputation to some extent. Switzerland's refugee policies during the war also came under fire. Around 25,000 Jewish refugees were turned back at the Swiss border. In 1996, the president of the confederation, Ruth Dreyfuss, made a formal Swiss apology for this.

The Political System and Neutrality
 

Switzerland remains a parliamentary federal state with 26 cantons committed to neutrality. Political decisions are made by consensus.

The federal constitution Switzerland adopted in 1848 remained in force through 1999, with only one revision in 1874; a new constitution came into force in 2000. Since 1959-1960, Switzerland has been a concordance or "consensus democracy," in which as many parties, associations, and social groups as possible are included in the political process and decisions are made by consensus.

This principle is the basis of the 11 Federal Council.

According to the so-called "magic formula," it is composed of representatives of four parties, who jointly seek political solutions. This system of government is very stable due to the lack of any opposition. The national government, however, only holds the authority mandated to it by 22 cantons, themselves in turn dependent on the "grassroots" democracy of the 3000 municipalities, and decisions on the federal and canton levels can be contradictory.

Women were granted suffrage on the federal level in 1971, for example, but the women in 7 Appenzell have been able to vote in their canton only since 1990.

The Swiss people have a long tradition of sometimes voting directly on important issues in open-air assemblies, especially in some mountain cantons where in the spring the citizens vote by a show of hands. This is particularly true with respect to changes to the constitution.

Consequently, the Swiss decided by referendum against joining the European currency system in 1992, against joining the European Union in 2001, and in favor of membership in the 10 United Nations in 2002.

Although Switzerland was a founding member of the European Free Trade Association in 1960, which does not conflict with the political principle of their neutrality, most Swiss citizens felt that EU membership would mean political 9 integration into the community of European nations.

Switzerland is already closely linked economically with the European Union through bilateral contracts, such as the agreement on 8 Alpine transit for heavy traffic, but the abandonment of traditional neutrality is rejected by most of the citizens.