Neutrality under Pressure. Swiss-Italian Relations in the Years of Fascism (1922-1943). The Swiss Strategy for Avoiding Military Conflict. Martin Emilov Neshev Master's thesis in Peace and Conflict Studies Department of Archaeology, Conservation and History University of Oslo Supervised by Professor Kim Christian Priemel Spring 2019 Word count: 38452 1 Acknowledgements First of all, I would like to express my deep gratitude to my mother Kalina and my father Emil for the sacrifices made in order to give me the opportunity to study in such prestigious university as the University of Oslo. Next, a special thanks goes to my supervisor, Mr. Kim Christian Priemel, for his exceptional attitude towards me, his dedication and invaluable assistance of highest quality during the preparation of this thesis. Words cannot express my gratefulness to my closest friends in Norway, Bård Nikolas Vik Steen and Tyler Barrott, without whose fantastic company and support in numerous occasions, I would have never gotten past the challenge of living in a new country or presenting this project. 2 Summary The project discusses the relations between Switzerland and Fascist Italy with particular focus on politics and economy as decisive factors for avoiding military conflicts. The research aims at discovering how the neutral and the authoritarian state managed to co-exist peacefully in the turbulent period between two world wars and how they have collaborated to overcome problems such as the existence of the fuorusciti group in Switzerland, the Great Depression, and the Italian invasion of Ethiopia in the mid-1930s. The strengthening of the relations between Fascist Italy and Nazi Germany further increased the difficulties for the Swiss political leadership and preserving the independence of the Confederation became even more complicated. After the occupation of France in June 1940, Switzerland was surrounded by Axis powers, which posed new challenges to the state’s neutrality and to the Federal Council. The study argues that Switzerland’s defence strategy was a rigid application of the Hague Convention agreements from 1907 in political, military and economic terms in the years between the start of the Second World War and the fall of the Fascist Regime in September 1943. The ethics of the decisions made by the Swiss political leadership may be debatable, but any discussion thereof calls for serious consideration of the extremely complicated conditions in which they were taken. 3 Copyright: Martin Neshev 2019 http://www.duo.uio.no Print: Copycat, Oslo 4 Table of contents 1. Introduction ................................................................................. 6 1.1. Primary sources ................................................................................................................ 10 1.2. Secondary sources ............................................................................................................. 11 1.3. State of research ................................................................................................................ 14 1.4. Outline of the project ........................................................................................................ 15 2. Background ................................................................................ 17 2.1. The Prehistory of Swiss neutrality, 1516-1914 ................................................................. 17 2.3. Neutrality in the shadow of the First World War (1914-1920) ........................................ 20 2.4. Domestic problems of Switzerland ................................................................................... 24 2.5. Switzerland, the League of Nations and the post-war years ............................................ 27 3. Swiss-Italian relations in 1922-1933 ......................................... 30 3.1. Consequences of the First World War for Switzerland and Italy ................................... 30 3.2. Political relations .............................................................................................................. 32 3.3. Economic relations ............................................................................................................ 38 4. Swiss-Italian relations 1933-1940 ............................................. 47 4.1. The Italian invasion of Ethiopia ....................................................................................... 47 4.2. The Swiss preparation for an eventual war ..................................................................... 52 4.3. Economic relations between Switzerland and Italy 1933-1940 ........................................ 54 4.4. First phase of the war ....................................................................................................... 59 5. Swiss-Italian relations June 1940 – September 1943 ............... 63 5.1. Political relations .............................................................................................................. 63 5.2. Economic relations between Switzerland and the powers from the Axis and the Allies . 72 5.2.1. Economic relations with the powers from the Axis ....................................................... 72 5.2.2. Commercial exchange .................................................................................................. 75 5.2.3. Importance of the Italian ports and the Swiss railway ................................................... 76 5.2.4. The role of the Swiss economy for diminishing the threat of war .................................. 79 5.2.5. Policy over the refugee question in 1940-1943 ............................................................. 80 5.3. Relations with the Allies 1940-1943 .................................................................................. 81 5.4. Swiss independence and neutrality in 1940-1943 ............................................................. 83 6. Conclusion .................................................................................. 85 7. Bibliography .............................................................................. 93 5 1. Introduction What comes first to people’s minds when they hear “Switzerland”? For the ordinary Europeans the country is famous for its winter tourism, which is tightly related to its mountain terrain. With its territory almost completely dominated by the Alps, the North and the South of the country are linked only by mountain passes often closed or inaccessible in winter. Apart from its rugged terrain, Switzerland is widely known as the bank of Europe due to the huge number of banks based in the country and the Confederation’s favourable policy to foreign investments. Geopolitically, meanwhile, it is Swiss neutrality that stands out. The country repeatedly stays away from taking part in international blocs such as the European Union, the North Atlantic Treaty Organisation (NATO), and it joined the United Nations (UN) only in 2002. Even if geographically Switzerland is the most centrally located of all states in Europe, it continues its principle of isolationism in its foreign policy. In fact, this idea has guided the country’s leaders through the centuries after being adopted as a basic foreign policy principle, or more concretely, since 1516 and the peace signed after the Battle of Marignano against the French.1 Partly due to its small territory compared to almost all of its neighbours like France, Italy, Germany and Austro-Hungary in the past, Switzerland’s position in the heart of Europe has always been a risky one. Taking a look back, for hundreds of years the country’s leaders have been trying to keep good-neighbourly relations with these bigger and militarily, and sometimes economically, stronger states, which on their part have not regarded Switzerland favourably. One example is Napoleon, who managed to conquer the small Alpine state during the years of his reign, in this way interrupting the Swiss neutrality for one of the longest periods ever since it was adopted.2 After his death and the Vienna congress in 1815, the Swiss neutrality was officially recognised and guaranteed by the major European Powers in the beginning of the twentieth century – Russia, Great Britain, Prussia, and Austro-Hungary.3 This was undoubtedly a huge achievement for the Swiss diplomacy and for the State as a whole, but the doubt remained – what would actually happen if the neutral state got invaded? It was hard to imagine such incidents happening in time of peace, but would the risk to the Swiss territorial borders increase and to what extent would that happen during wars? What if 1 Clive Church/Randolph Head, A Concise History of Switzerland, Cambridge: Cambridge University Press, 2013, p. 66. 2 Church/Head, History, pp. 130-145. 3 Guido Calgari, Storia della Svizzera, Lugano: Fondazione Ticino nostro, 1969, p. 87. 6 this “guaranteed neutrality” is not respected by some country’s future rulers? Or even worse, what would be the consequences if the treaty is disregarded by more than one state, possibly all of them joining forces against the Confederation?4 These peculiarities of the Swiss state – the geographical position in Europe, the geological features (the Alps), its status as a significant international financial marketplace, and the neutrality principal in their foreign politics – have been the pillars around which the Swiss strategy to survive independently has been built upon. The Swiss position was put to a series of tests during the first half of 20 century – the