Switzerland country profile
Through a range of agreements in different sectors, the EU has a closer relationship with Switzerland than with any other country outside the European Economic Area (EEA). Switzerland is the EU's 4th largest trading partner, and the EU is Switzerland’s largest trading partner. More than 1 million EU citizens live in Switzerland, and another 230,000 cross the border daily to go to work. Some 430,000 Swiss citizens live in the EU.
Member of Schengen area:Yes
Political system: Swiss Confederation
Capital city: Berne
Total area: 41 290 km²
Population: 7.6 million
Currency: Swiss franc
Economy overview
Switzerland, a country that espouses neutrality, is a prosperous and modern market economy with low unemployment, a highly skilled labour force, and a per capita GDP among the highest in the world. Switzerland's economy benefits from a highly developed service sector, led by financial services, and a manufacturing industry that specializes in high-technology, knowledge-based production. Its economic and political stability, transparent legal system, exceptional infrastructure, efficient capital markets, and low corporate tax rates also make Switzerland one of the world's most competitive economies.
The Swiss have brought their economic practices largely into conformity with the EU's to enhance their international competitiveness, but some trade protectionism remains, particularly for its small agricultural sector. The fate of the Swiss economy is tightly linked to that of its neighbours in the euro zone, which purchases half of Swiss exports. The global financial crisis of 2008 and resulting economic downturn in 2009 stalled demand for Swiss exports and put Switzerland into a recession. During this period, the Swiss National Bank (SNB) implemented a zero-interest rate policy to boost the economy, as well as to prevent appreciation of the franc, and Switzerland's economy began to recover in 2010.
The sovereign debt crises unfolding in neighbouring euro-zone countries, however, coupled with ongoing economic instability in Russia and other eastern European economies continue to pose a significant risk to the Swiss economy, driving up demand for the Swiss franc by investors seeking a safe-haven currency. In January 2015, the SNB abandoned the Swiss franc's peg to the euro, roiling global currency markets and making active SNB intervention a necessary hallmark of present-day Swiss monetary policy. The independent SNB has upheld its zero interest rate policy and conducted major market interventions to prevent further appreciation of the Swiss franc, but parliamentarians have urged it to do more to weaken the currency. The franc's strength has made Swiss exports less competitive and weakened the country's growth outlook; GDP growth fell below 2% per year from 2011-15.
In recent years, Switzerland has responded to increasing pressure from neighbouring countries and trading partners to reform its banking secrecy laws, by agreeing to conform to OECD regulations on administrative assistance in tax matters, including tax evasion. The Swiss government has also renegotiated its double taxation agreements with numerous countries, including the US, to incorporate OECD standards, and is openly considering the possibility of imposing taxes on bank deposits held by foreigners.
Trade
Switzerland's economic and trade relations with the EU are mainly
governed through a series of bilateral agreements where Switzerland has
agreed to take on certain aspects of EU legislation in exchange for
accessing the EU's single market.
Source: Europa, CIA World Factbook
Useful links
Delegation of the EU to Switzerland and Liechtenstein
