Switzerland Unwrapped: Exposing the Myths 
by Mitya New.
Tauris, 210 pp., £18.95, June 1997, 1 86064 300 0
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Blood Money 
by Tom Bower.
Macmillan, 387 pp., £16.99, March 1997, 0 333 71517 9
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For forty years after the Second World War, the Swiss had every reason to believe that theirs was the optimal form of government. There was political and social stability, full employment, virtually no crime and, for a time, the highest per capita income in the world. Switzerland’s system of government with its many celebrated peculiarities was not only unique but uniquely successful. Which helps explain why the country’s fall from grace has been so hard to bear. Not only is Switzerland now widely reviled as having been the fence for stolen Nazi loot: it is facing its first serious economic depression in living memory, with unemployment at 6 per cent and rising. Industries which once led the world face ever tougher foreign competition. Many Swiss are beginning to wonder what they have to do to stay on top: do their traditional institutions need reforming?

Take the Army, which requires nearly every male to undertake periods of military service for most of his adult life. Thanks to this, the Army boasts, the entire male population can be mobilised within 24 hours. Virtually every home contains a semi-automatic machine-gun with live ammunition. Such preparedness is credited with having deterred invasions of Switzerland for centuries, but the once unshakeable confidence in Swiss military prowess is slipping away. Even within the country it’s now accepted that Hitler’s decision to leave Switzerland alone, for example, was influenced more by his need of the services offered by the gnomes of Zürich than by fear of the people’s army. The current economic crisis is also having an impact on the Swiss military: companies are increasingly reluctant to let staff go for one or two months a year on military training courses which put an intolerable strain on productivity.

Neutrality, too, enshrined in international law since the Congress of Vienna in 1815, is coming under intense scrutiny. Historians and political scientists have built a whole national philosophy out of neutrality, describing it as the only moral stance for a country to adopt; as an expression of Switzerland’s philanthropic values; and as a geopolitical manifestation of the moral standards that lie behind one of Switzerland’s great contributions to the world – the Red Cross movement. During the Cold War the policy worked well. It afforded Switzerland an opportunity to provide diplomatic ‘good offices’ acceptable to East and West. But these are now irrelevant. And the grand theories justifying Swiss neutrality have been undermined, if not completely demolished, by the recent reassessment of Switzerland’s conduct during the Second World War.

Even if neutrality remains an ideal for most Swiss, mainstream politicians are losing faith in it. They know that the policy has always been a pragmatic one. Involvement in a European war – especially one in which Germany and France were adversaries – would tear Switzerland apart, with the Swiss-French speakers sympathising with the French, the Swiss-German with the Germans. Such considerations are beside the point today, when the chief strategic threat lies to the East, a potential source of millions of refugees. The political élite calculates that the best defence against a debilitating influx is to create solid ties with the West, and with Nato in particular. The decision to allow Nato troops bound for Bosnia to use Swiss airspace ran counter to the established principles of neutrality, but refusal was not a realistic option.

Questions are also being asked about direct democracy. Swiss ministers like to say that they govern the world’s most effective democracy. In some respects they are right – for example, decentralisation allows the 26 cantons to run most of their own affairs – but it is a system so archaic that decisions are slowed down to a pace which many believe unsustainable in the modern era. At the heart of Swiss politics are the referenda. The average Swiss citizen can expect to cast his (and in more recent years, her) vote on as many as twenty different issues a year. Some of these plebiscites – all of which are legally binding – decide fundamental matters like whether the country should have an army. Others concern matters of importance to a local community such as whether a new school should be built or a road improved.

Occasionally the votes throw up radical results. In Zürich, for example, successive referenda over a 25-year period have produced majorities in favour of public transport against the car. The result is probably the best public transport system in Europe, used by bankers and manual labourers alike. A referendum on the Swiss Army produced a remarkable 40 per cent in favour of abolition. More generally, the referenda act as a brake on change. The Swiss have voted to stay out of Europe in all its forms. In 1959 female emancipation was rejected; it was not until 1971 that women were enfranchised for all Federal elections. One canton – Appenzell Innerrhoden – held out, denying women the right to vote at local level until 1990.

Direct democracy is so highly prized by the Swiss that the vast majority seem prepared to live with the results, however perverse and regressive. The real problems arise when international issues come into play. While the Swiss Government knows that it cannot abolish direct democracy it is increasingly willing to sidestep it. Take the recent decision to join Nato’s Partnership for Peace. Aware that it could never get the idea past a referendum, the Government used a Constitutional dodge and forced the issue through without a plebiscite.

One referendum the Government won’t be able to avoid is next year’s vote on a proposed multi-billion pound Solidarity Foundation, designed to atone for wartime misconduct. An increasingly defensive electorate could reject the whole idea. If it does, the country’s international isolation will become more pronounced and its economic prospects further threatened. Had the Government been able to set up the fund on its own initiative, it could have seen off the bulk of the criticism Switzerland now faces. Direct democracy precluded such a solution.

It also compounds the country’s economic difficulties. In the ever more open global economy protectionism makes no sense. High labour costs mean Swiss goods are increasingly uncompetitive. Most Swiss economists agree that access to the EU market offers the only way out. But while politicians are almost unanimously in favour of EU membership, the Swiss electorate stubbornly rejects it, refusing to accept that Switzerland can’t go it alone. Forty years of economic success have made people smug: with unemployment getting worse every month it can’t last.

Then there is the issue of Swiss conformity. Visitors are often astounded that one is not allowed to flush a toilet in an apartment block after ten o’clock at night and that people wait for the green light at pedestrian crossings for four or five minutes even if there isn’t a car in sight. These may be trite examples but Switzerland’s love of rules has more sinister manifestations, such as people denouncing their neighbours to the police for quite minor infractions of the law. Mitya New’s book, a series of interviews with people who at different times refused to accept the consensus, provides great insight into this conformism. The daughter of a minor official, Paul Grueninger, who saved thousands of Jews during the war by falsifying their papers, talks of the social ostracism her father suffered for the rest of his life. Even his relatives shunned him, although many believed he had done nothing wrong. Another interviewee, a Swiss gypsy, describes how, even in the Seventies, gypsy children were routinely kidnapped by a major charity and given to ‘right-thinking’ foster parents.

Perhaps the most revealing of Mitya New’s conversations is one with a Zürich-based lawyer, Reinhard von Meiss, who lovingly describes the city’s equivalents of Pall Mall’s clubs, the guilds. These, von Meiss says, are ‘exclusive clubs for the bourgeoisie and for men’, where ‘Jews, by and large, don’t fit in’. He speaks of the guilds’ political influence – they can sway public opinion because they enjoy ‘a certain respect and authority’. Attitudes of this kind may be commonplace among the older generation, but in many cases young Swiss people have at least as much in common with their West European counterparts as they do with their conservative parents.

The feeling that change is inevitable has been reinforced by the lame reaction to recent foreign criticism. The most difficult issue has been the wartime attitude to Jewish refugees. In the first years of the war some were allowed in; later, they were denied entry and, as the Swiss Government now admits, were sent back from the border to face certain death. Stories have emerged of refugees committing suicide as Swiss border guards looked on. The ‘J’ stamp in the passports of German Jews was put there at the request of the Swiss. Even the Red Cross now concedes that it failed in its duty to the people it visited in the concentration camps: in at least one case it even reprimanded staff who were trying to save Jewish children in France.

Swiss industrialists provided material support for the German war machine and made high profits in the process, while leading companies took advantage of Nazi repression to buy German Jewish companies at knock-down prices. Shortly before the war, a Swiss shoe manufacturer bought the largest German chain of shoe-shops for the price of a ticket to America for its Jewish owner.

As we all know, the banking sector, too, had a good war. The Swiss National Bank knowingly bought gold stolen from central banks in countries occupied by the Nazis. It also bought gold plundered from Holocaustvictims, including teeth. The commercial banks took money from both Nazis and their Jewish victims. They insist, though, that they do not deserve to be singled out for criticism; and that no government or impertinent foreign journalist will deflect them from their prime responsibility: of looking after the interests of their clients. But how assiduously have they done so? After decades of resistance, they recently agreed to publish a list of dormant account holders. It contains nearly two thousand names of people who opened accounts before and during World War Two and which have remained dormant ever since.

Many Jewish families tried to protect their assets from the Nazis by putting their money into Switzerland. When, after the war, survivors went to find that money, the banks refused to help. In many cases they said they needed death certificates so that they could establish whether a claimant had the right to an account. And until recently they were deaf to the argument that Hitler hadn’t provided such documentation. But now that a list has been published, it’s clear that many of them could have been traced quite easily, had the banks been so disposed. Instead they sat on the deposits, in some cases paying no interest.

The most charitable explanation is that they were afraid of paying out twice: of handing over an account to a claimant only to find themselves confronted later with a closer relative of the victim. But many claimants believe that there is another, more sinister, reason: that in the immediate postwar years some bankers, lawyers and accountants reckoned that the Jewish account-holders had died without trace and decided to take the money for themselves.

As a marketing tool Swiss banking secrecy, written into the country’s laws since 1934, has been an unqualified success. Drug-runners, tax-evaders and despots (and some honest depositors, too) have sent their billions to Switzerland for safe keeping. To the horror of officials at the Swiss Bankers’ Association, it turned out that not all those on the recently published lists were Holocaust victims. Some were among the perpetrators: senior Nazi officials and their collaborators, who had doubtless been sending wartime booty to Switzerland.

When it comes to assessing the country’s wartime conduct, the facts are for the most part known. The question is how to judge them. Tom Bower stands at one extreme of the argument. For him the Swiss are ‘no longer just a peculiarly charmless people’: they have been shown up to be ‘dishonest Nazi collaborators who had profited from the genocide’. But his sweeping claims only tell part of the story. He gnores the fact that some Swiss citizens braved the prevailing climate and gave shelter to Jews. But there is very little the Swiss can say in answer to many of his detailed charges. The country did profit from the genocide and, as he demonstrates, in the postwar period Swiss negotiators refused to hand over their gains.

Many Swiss claim that their critics have less than pure motives: that financial institutions in London and New York have driven the anti-Swiss campaign with a view to blackening the reputation of the banks and thereby picking up some of their clients. The actual motives of many of the critics are quite different, I suspect. The leading anti-Swiss US campaigner, Senator Alfonse D’Amato may, as he says, be looking for justice: he also has a large Jewish community in his constituency. Other critics, consciously or not, are driven by their own nationalist agendas. Much of the vitriol heaped on Switzerland by the press in Britain seems to reflect the (usual) desperate wish to see the war as a (rare) British success story.

Perhaps the strongest line of defence for the Swiss is one they are reluctant to use openly: that they were by no means the only, or the greatest, wrongdoer. Government officials charged with restoring Switzerland’s image talk privately of the need for other neutral countries, such as Sweden, Spain and Portugal, to face up to the reality of their own wartime conduct. They point out that even the victorious Allies are coming under scrutiny. The French have so far failed to explain why some Government officials still live in apartments appropriated from Jews who died in the Holocaust. But the process of reassessing their own conduct will remain especially tough for the Swiss, whose reputation for probity means they have further to fall.

The most telling comment has come from one of the country’s prominent Jewish citizens, Rolf Bloch, who faces the classic dilemma of a Jewish community leader. He wants wrongs, especially those committed by the banks, to be righted; but he is aware that pushing too hard could provoke an anti-semitic backlash. When addressing Swiss audiences he puts it this way: the Swiss people have for years thought they had a special place in the world, blessed by nature with a beautiful country and universally respected for their economic success and humanitarian generosity. What they have to realise is that they are in fact like everyone else. They may have behaved reprehensibly during the war, but so did others. The difficult thing for many Swiss to grasp is not that they behaved worse than others but that they behaved no better.

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Vol. 19 No. 21 · 30 October 1997

As Owen Bennett Jones’s piece on Switzerland (LRB, 21 August) makes clear, neutral is no longer synonymous with clean, right and law-abiding. Neutral countries are supposed to breed neither heroes nor villains, but Switzerland did manage to have one hero, in the very unlikely person of Paul Grüninger, who in 1938 was the chief of police in the Canton of St Gallen, which shares a border with Austria. After the Anschluss Jews were very eager to get out of Austria, but the official Swiss response was to close the border and deny them admittance to Switzerland. Paul Grüninger chose instead to falsify the admittance applications of anything between six hundred and three thousand Austrian Jews by back-dating the applications to the period before the border was closed. As he said at the time, he could not live with the policy and valued morality above bureaucratic orders. In 1939 the 48-year-old police chief was fired from his job and a subsequent judicial procedure stripped him of all pension rights. He died in 1981, and after many unsuccessful attempts on the part of those who felt he had been wrongfully treated, the St Gallen Government finally granted him a complete rehabilitation in 1995.

Tony Woolfson

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