Warnings that Switzerland is losing its standing on the world stage have emerged simultaneously from business and politics. Concerns are spreading that Switzerland's system, based on neutrality, consensus, and direct democracy, is not responding fast enough to a rapidly changing international order.
On the 22nd (local time), the Financial Times (FT) of the United Kingdom reported that UBS Chair Colm Kelleher warned in public remarks last month that "Switzerland is losing its shine and stands at a crossroads of significant challenges." Kelleher cited intensifying competition in the global wealth management market, the hit to the pharmaceutical and export industries from high U.S. tariff rates, and a regulatory environment increasingly seen as diverging from the liberal order as key reasons. Severin Schwan, chair of Basel-based pharmaceutical giant Roche, also voiced a strong sense of crisis, saying that global investment pressures and slow political decision-making are threatening Switzerland's competitiveness.
For decades after the war, Switzerland was seen as relatively insulated from Europe's various crises thanks to decentralized direct democracy, a stable currency, and a predictable diplomatic and industrial structure. But over the past year, that stability has begun to wobble. Debates over the meaning of neutrality and relations with the European Union have emerged as issues that can no longer be postponed. These issues were also flagged as having the potential to lead to social division through future referendums.
UBS, which acquired investment bank Credit Suisse in 2023 through a government-led bailout, clashed with the government over capital regulation. On top of that, the U.S. administration imposed high tariffs on Swiss products, intensifying a tariff dispute. This was seen as exposing the structural vulnerabilities of Switzerland, which is not part of an economic bloc. Scenes of Swiss corporate executives visiting the White House to lobby during the tariff dispute were viewed as out of step with traditional Swiss diplomacy.
Investigations surrounding former World Economic Forum Chair Klaus Schwab, the symbol of the Davos Forum, and governance and regulatory controversies at some large corporations and private banks also fueled unease. In a society that has prized prudence and a quiet corporate culture, these incidents were perceived as symbolic shocks.
Still, some emphasized Switzerland's structural resilience. The country maintained its status as the world's largest cross-border wealth management hub. Capital inflows and assets under management hit all-time highs. A strong franc, low inflation, and stable employment conditions also supported economic fundamentals. Switzerland's past success in transforming its industrial structure after the watch industry crisis and the end of banking secrecy was cited again.
Experts assessed that the current sense of crisis is more likely a signal of transition than of decline. Whether the Swiss model of neutrality, consensus, and direct democracy can be adjusted to a faster-changing world was identified as the key variable that will determine the country's future standing. Switzerland's fundamental strengths remain intact, but a warning that complacency could be the biggest risk is spreading across business and politics.