Changes in Europe Create a Dilemma for Swiss : Trade: Some leaders worry that Switzerland will miss out if it is not part of the European Community. Others fear a loss of independence.


Switzerland, for centuries an island of peace in a troubled Europe, is increasingly haunted by fears of isolation in an emerging super-continent.

It is a wealthy country that has traditionally regarded itself as a special case, treasuring its vaunted neutrality and a stability that has helped attract capital from all over the world.

But as the newly democratic states of Eastern Europe look toward the 12-nation European Community for economic deals and political cooperation, Swiss leaders are worrying about being left out.

“It would be like being the only one in a school class not invited to join the soccer team,” said Franz Blankart, Switzerland’s chief negotiator in talks on European integration.


Pressure for full EC membership is increasing from companies eager to share the economic benefits promised by the removal of trade barriers at the end of 1992.

At the same time, however, there are loud warnings from conservative groups that EC membership would jeopardize Switzerland’s independence and its system of direct democracy, under which the people have the final say on all important legislation.

The government says it is not ready to join the Economic Community. It is engrossed instead in complex talks aimed at achieving a far-reaching agreement between the powerful Community and the six-nation European Free Trade Assn.

Switzerland, Austria, Norway, Sweden, Iceland and Finland are members of the loosely knit EFTA. Austria already has applied for EC membership, swallowing fears for its neutrality.


The talks with the Community are meant to lead to the creation of the European Economic Space, which would provide for the free movement of goods, people, capital and services among the 18 European countries, creating a market of 350 million people.

Of all the EFTA members, Switzerland is the most dependent on the EC for trade. According to government figures, 57% of Swiss exports went to EC countries last year, and 74% of Swiss imports came from EC nations.

But the path toward creating a super European market has been rocky. Swiss demands for exemptions from certain provisions demonstrate the problems that would beset an application for full Swiss membership in the Community.

For example, the government wants to keep the right to limit the number of foreigners living in a land in which about 15% of the 6.5-million population is not Swiss. Full EC membership would not allow keeping that limitation.


Switzerland could also be forced to change its system for holding national referendums.

The EC also has objected to giving Switzerland and others in the European Free Trade Assn. an equal say in the decision-making process, which has fueled speculation that the negotiations will end in failure.

The Swiss government says that in that event, there would be two choices for it: either adopting a go-it-alone policy or full EC membership.

“The go-it-alone policy for me is an unrealistic solution,” says Swiss Foreign Minister Rene Felber. “The consequences would be isolation, which would be unbearable for a land in the middle of Europe with all our economic, cultural and social connections.”


The powerful farming lobby does not share this concern. It is opposed to EC membership, fearing that agriculture prices would drop and that markets that are now protected would be opened.

A government report says, however, that business concerns would, on the whole, benefit from EC membership. Experts say medium-size companies in particular would benefit. The largest Swiss banks and multinational corporations such as Nestle S.A. already have secured footholds in EC countries.

Economics Minister Jean-Pascal Delamuraz says EC membership is an option for the long-term, and he dismisses the urgings for an immediate application as “premature.”