Switzerland - Economic development
Private enterprise is the basis of Swiss economic policy. Although government intervention has traditionally been kept to a minimum (even with monopolistic formations), international monetary crises from late 1974 to mid-1975 led to imposition of various interim control measures; in 1982, with inflation rising, a constitutional amendment mandating permanent government price controls was approved by popular referendum. The Swiss National Bank has followed a general policy of limiting monetary growth. To further raise the standard of living, the government also grants subsidies for educational and research purposes, promotes professional training, and encourages exports. Although certain foreign transactions are regulated, there is free currency exchange and a guarantee to repatriate earnings of foreign corporations.
The cause of the remarkable stability of Switzerland's economy lies in the adaptability of its industries; in the soundness of its convertible currency, which is backed by gold to an extent unmatched in any other country; and in the fact that the particular pattern of Swiss democracy, where every law may be submitted to the popular vote, entails taking into account the wishes of all parties whose interests would be affected by a change in legislation.
Switzerland's development assistance program takes the form of technical cooperation, preferential customs treatment for certain third-world products, and a limited number of bilateral aid arrangements.
The question of future European Union (EU) membership remains a point of contention among Swiss. The French-speaking minority overwhelmingly favors EU membership, while the German-speaking majority strongly opposes it. In a 2000 referendum, Swiss voters approved closer ties to the EU. Some of the key provisions of the deal included agreement to allow EU trucks transit rights through Switzerland, as well as granting Swiss freedom of movement in the EU after 2003 with no Swiss reciprocation until 2013. Although "Europhiles" (those in support of EU membership) hailed the outcome of referendum, "Euroskeptics" (those opposed) also claimed victory by claiming that the provisions of the referendum reflected the extent of the Swiss public's acceptance of EU intrusion.
Switzerland's economy was in recession in late 2002, and growth was stagnant in 2003 at 0.3%; it was only forecast for 1.2% in 2004. The financial sector was particularly affected by the slowdown in the economy. Inflation remained negligible, however, and the external current account ran a surplus. Interest rates were near zero, and the Swiss franc appreciated. A new ordinance covering the banking sector was enacted in 2002, to combat money laundering and the financing of terrorism. Switzerland joined the UN in 2002.