1. Switzerland – facts and figures. Nestled between the Alps and the Jura mountains, Swit- the two largest of which are shared with its neighbors: for example zerland is a communications and transport center between Lake Geneva (Lac Leman) in the South-West with France, while northern and southern Europe where European cultures and Lake Constance in the North-East is shared with Germany and languages meet. No other country offers such great variety in Austria. so small an area. The Swiss economy’s high degree of devel- opment exists thanks to its liberal economic system, its po- litical stability and its close integration with the economies of An overview of Switzerland other countries. The state creates the necessary framework and only intervenes when this serves the interests of society www.swissworld.org at large. Its high quality education system and outstanding Languages: German, English, French, Italian, Spanish, Russian, infrastructure form the basis for the competitiveness of the Chinese, Japanese Swiss economy. 1.1 Geography. Fig. 2: Map showing the location of Switzerland The total area of Switzerland is 41,285 km2. Characterized by mountain and hill ranges, rivers and lakes, Switzerland offers a wide variety of landscapes in a small area – 220 km from North to South, and 348 km from West to East. The Swiss Alps, the hilly Mittelland region, which stretches from Lake Constance to Lake Geneva, and the Swiss Jura, a long range of fold mountains, form the three main geographical areas of the country. Due to its central location, Switzerland is a place where different cultures intersect and, at the same time, a communications and transportation hub between northern and southern Europe. Six percent of Europe’s fresh water supply is stored in the Swiss Alps, which is why Switzerland is also known as the «reservoir of Europe». Switzerland has numerous rivers and over 1,500 lakes, Handbook for Investors 2012 9 1.2 Climate. The proximity of politics to the business community and citizens is achieved through the federal structure, in which many public Switzerland’s climate is strongly affected by the nearby Atlantic functions are executed at cantonal or municipal level. These in Ocean. The prevailing winds from the West bring damp, mild sea turn have a certain amount of autonomy and can thus implement air over to Switzerland. Cooling in the summer and warming in solutions which are designed to meet local requirements. the winter, they also bring sufficient precipitation all year round 1.3.2 Separation of powers at federal level in most areas. The Alps act as a clear climatic divider between northern and southern Switzerland; as its weather comes prima- Online information of the federation, cantons and munici- rily from the direction of the Mediterranean, the South enjoys palities much milder winters than the North. Temperatures in Switzer- land depend primarily on height above sea level. In the northern www.ch.ch lowlands, the average temperature in January is around 1 °C, and Languages: German, English, French, Italian in July around 17 °C, whereas on the southern plateau the cor- responding average temperatures are 2 °C – 3 °C higher. In accordance with the federal constitution, the Swiss people are the «sovereigns» of the country – in other words, the highest The weather and climate in Switzerland political body, responsible for electing parliament. Every citizen with voting rights also has the right to participate in the shaping www.meteoschweiz.ch of the constitution and the legal system by means of referendum Languages: German, English, French, Italian or initiative. The Federal Assembly or parliament consists of two chambers: the National Council, representing the people with 200 members, 1.3 Political system. and the Council of States, representing the 26 cantons with a total of 46 members. The National Council is elected directly by 1.3.1 Federal structure the people every four years; each canton forms one constituency. Switzerland is a nation created by its own will and formed from Cantonal representation is based on population, although each several ethnic groups with different languages and religions. canton is entitled to at least one representative. The modern Swiss state was founded in 1848. Before this time, Switzerland consisted of a loose association of independent can- The federal government is known as the Federal Council, and it tons. The abbreviation CH for Switzerland, as found in Internet operates as a collegial body. Each of its seven members, who addresses, for example, dates back to the official Latin name are elected by the Federal Assembly comprising the members of «Confoederatio Helvetica». both chambers, heads one of the seven departments (ministries). The presidency of the government rotates between the Federal The state has a federal structure and is divided into three political Councilors on an annual basis. levels: municipal, cantonal and federal. The federal government is responsible for everything assigned to it under the constitu- The highest jurisdiction in Switzerland is enforced by the Federal tion, such as foreign and security policy, customs and excise, Supreme Court in Lausanne, the Federal Insurance Court in Lu- the monetary system, national legislation and defense. By global cerne, the Federal Criminal Court in Bellinzona and the Federal Ad- comparison, the 26 cantons have a high degree of control. ministrative Court in Berne (from the middle of 2012 in St. Gallen). Healthcare, education and culture are among the political areas in which they have a great deal of influence. As small and flexible political entities, the cantons also compete with each other in various areas. 10 Handbook for Investors 2012 Fig. 3: The political system in Switzerland Legend Voters Instruments Swiss citizens from the age of 18 Elections Higher Courts Parliament Federal Council Federal Court, Criminal Court and National Council (200 Members) and (Government) Administration Court Council of States (46 Members) 7 Members Source: Swissworld.org/Präsenz Schweiz 1.3.3 Direct democracy and the concordance system 1.3.4 Political stability and social harmony There is hardly any other country where the electorate has such Studies on personal security and prosperity, social coherence and wide-ranging rights as it does in Switzerland. Citizens can request political stability have shown that Switzerland regularly leads all that a change or addition be made to the constitution by means of international comparisons in this regard. The Swiss attach great an initiative, or they may decide on parliamentary resolutions after importance to their independence. the event by means of a referendum. Switzerland’s long tradition of democracy, its relatively small size and population, high levels Despite the close proximity of different cultures and language of literacy and a wide variety of media are all factors which are key groups, domestic stability is considerable. There is a high degree to the functioning of this special form of government. As a rule, the of tolerance and personal freedom. The relationship between electorate is called upon to vote on federal bills four times a year. employers and employees, or their representatives is generally co- operative. Both sides are committed to resolving issues by means A unique feature of Swiss politics is the concordance system. For of negotiations. Thanks to this social harmony, the general level of decades, the most important political parties have put forward the prosperity in Switzerland has been rising for decades. seven Federal Councillors in a form of coalition. Equally, not only those who win the elections have a seat in parliament; all parties are represented proportionally by number of votes. Resolutions are reached with varying majorities, depending on respective interests. Thus, as many groups as possible have the opportunity to express their opinions on a topic and contribute to achieving a broad- based compromise. This striving for consensus on the basis of the principles of collegiality and concordance contributes significantly to Switzerland’s political stability. Handbook for Investors 2012 11 Fig. 4: Political stability, 2011 1.4 Public finances. Political orientation stable = 10, unstable = 0 1 Norway 9.49 Switzerland lives up to its reputation as a stable country. The 2 Switzerland 9.49 rate of inflation lies well below that in the EU states and the most 3 Chile 9.48 important industrialized nations. This is also true for unemploy- 4 New Zealand 9.41 ment, with the unemployment rate regularly below four percent. 5 Finland 9.18 Interest rates in Switzerland are also traditionally low, while the 6 Germany 9.11 savings rate is high (national saving as a percentage of GDP in 10 Denmark 8.94 2009: 30.8 %). 11 Luxemburg 8.92 14 Singapore 8.50 The public spending ratio measures expenditure by public admin- 15 USA 8.47 istrations as a percentage of the gross domestic product (GDP). It 16 Netherlands 8.33 includes spending by public authorities and the mandatory social 17 Great Britain 8.25 insurances. In Switzerland, this ratio is at 34.6 % (2009). Most 18 Brazil 8.17 European countries have a ratio of well above 50 %. 19 France 8.09 20 Hong Kong SAR 7.57 The country is in a healthy financial situation. This applies to the 22 China 7.15 financial budget of the central state, the federal government as 29 India 6.71 well as the cantons and local authorities. The surplus ratio in 35 Ireland 6.33 2010 was 0.5 % at state level. 48 Russia 4.90 51 Italy 4.58 National debt is also below that of most countries in Europe. Total 54 Belgium 4.03 public sector debt amounts to 39 % of GDP (2010). Compared to 55 Japan 3.89 the average national debt ratio of EU countries (78.9 %), Swit- Source: IMD World Competitiveness Online 2011 zerland’s ratio is relatively low.