Verisoph story dossier
Why Switzerland is neutral: the 1815 Congress of Vienna guarantee, the Red Cross and Geneva, and the banking secrecy that made it the world's vault, set against the dark wartime record of trading with the Nazis and laundering their looted gold.
Why Switzerland is neutral: the 1815 Congress of Vienna guarantee, the Red Cross and Geneva, and the banking secrecy that made it the world's vault, set against the dark wartime record of trading with the Nazis and laundering their looted gold.
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The three cantons of Uri, Schwyz and Unterwalden swore a defensive pact against outside rule, the document later treated as the founding charter of the Swiss Confederation. It bound the communities to help one another and to settle disputes among themselves rather than submit to foreign lords. The alliance grew over the following centuries into a loose federation of cantons.
Pope Julius II hired a permanent corps of Swiss soldiers, formalising a trade that had already made Swiss mercenaries the most sought-after infantry in Europe. For generations, hiring out fighting men to foreign kings and popes was one of the poor cantons' main exports. This mercenary culture, not principled pacifism, was the Confederation's first relationship with Europe's wars.
French and Venetian forces under Francis I crushed the Swiss pikemen in two days of fighting near Milan, killing thousands. The loss ended the Confederation's ambitions to expand into northern Italy. Historians commonly mark it as the turning point that pushed the cantons away from foreign conquest and toward staying out of the great powers' wars.
The treaties ending the Thirty Years' War formally exempted the Swiss cantons from the jurisdiction of the Holy Roman Empire, negotiated for the Confederation by Basel's mayor Johann Rudolf Wettstein. This confirmed in law an independence the cantons had held in practice for generations. A recognised, self-governing Confederation was now a fixed part of the European order.
As Europe's powers redrew the map after Napoleon, they issued a declaration recognising the permanent neutrality of Switzerland and the inviolability of its territory. Neutrality here served the powers as much as the Swiss: a stable buffer state sat between France, Austria and the German lands where no rival could gain advantage. The principle was thus written into the postwar settlement by the great powers themselves.
In a formal act signed at Paris, the major powers confirmed and guaranteed Switzerland's perpetual neutrality and the integrity of its borders. This turned the Vienna declaration into a binding international guarantee backed by the signatories. It is the legal foundation on which modern Swiss neutrality still rests.
The Geneva businessman Henri Dunant came upon the aftermath of a battle that left tens of thousands of soldiers dead and wounded with almost no medical care. He organised local villagers to treat men from both sides, then wrote an account, A Memory of Solferino, calling for trained volunteer relief societies and rules to protect the wounded. The book set in motion the founding of the Red Cross.
No sooner had Austria suffered what looked like a fatal blow at Solferino (June 24) than Napoleon hastily made terms, fearful—and understandably so—of what might follow Prussia’s mobilisation in the Rhineland.The House of Rothschild
A committee of five Geneva citizens, including Dunant, formed the body that became the International Committee of the Red Cross. Neutral Switzerland gave the organisation a home from which it could aid victims on all sides without being seen as taking part in a war. The white flag with a red cross reversed the Swiss national colours, tying the movement to its country of origin.
also in State, law, and coercion, The law of nations
Convention for the amelioration of the condition of wounded soldiers in the field, inspired by Henry Dunant and the new Red Cross. It founded modern international humanitarian law.
also in Money and finance, The bankers
Switzerland's central bank opens for business, taking over note issue from dozens of cantonal and private banks. It becomes guardian of the Swiss franc, one of the world's key reserve currencies.
The new League of Nations made neutral Geneva its headquarters, and Switzerland joined on terms that let it take part in economic but not military sanctions, a status known as differential neutrality. The choice confirmed Switzerland's place as a meeting ground for international diplomacy. It began Geneva's long career as a centre of world organisations.
Switzerland's banking law made the disclosure of a client's account a criminal offence, giving banking secrecy the force of the penal code. Combined with a neutral, stable state, this drew foreign wealth into Swiss banks and helped build the country's reputation as the world's safe. A popular story holds that the law was written to shield Jewish money from the Nazis, but historians attribute it mainly to a bank-spying scandal and to domestic economic interests.
Swiss authorities negotiated an arrangement with Nazi Germany under which the passports of German Jews were marked with a red letter J. The stamp let Swiss border guards identify and turn back Jewish refugees while keeping the frontier open to other Germans. The Swiss request for a way to single out Jewish travellers is documented; historians describe it as an act of state antisemitism in refugee policy.
After the fall of France left Switzerland fully surrounded by the Axis, General Henri Guisan gathered his officers at the Rütli meadow, the Confederation's founding site, and set out a plan to withdraw the army into an Alpine fortress and fight on if invaded. The National Redoubt aimed to make conquering Switzerland more costly than it was worth. The stance is often cited as armed neutrality, though the country's survival also owed much to its economic usefulness to Germany.
also in How the West supported the Nazis: finance, appeasement, and Cold War bargains
Through the war the Swiss National Bank bought well over a billion francs of gold from Germany's Reichsbank, providing hard currency that helped Germany pay for war materials. Much of that gold had been looted from the central banks of occupied countries such as Belgium and the Netherlands, and some came from the possessions of Holocaust victims. In the 1946 Washington Agreement Switzerland paid 250 million francs to the Allies without admitting wrongdoing; historians divide over whether the trade was active complicity or the pragmatism of a cornered small state.
Swiss authorities ordered the borders shut to civilian refugees, stating that people fleeing on racial grounds alone would not count as political refugees. Federal Councillor Eduard von Steiger defended the policy with the phrase that the lifeboat was full. Later official inquiry found that Switzerland turned away roughly twenty-four thousand refugees, many of whom were sent back toward Nazi-controlled territory and death.
After the League dissolved, the United Nations took over its Geneva headquarters, the Palais des Nations, as the organisation's European office. Switzerland hosted the UN's second-largest centre for decades before it finally joined the organisation as a member in 2002. Geneva remained a hub for disarmament talks, human rights bodies and humanitarian agencies.
After the United States and Iran broke off relations during the hostage crisis, Switzerland took on the role of protecting power, representing American interests in Tehran. Acting as a neutral go-between for states that will not talk directly is the practical work of Swiss good-offices diplomacy. Switzerland has played this quiet intermediary role in a number of conflicts down to the present day.
After years of pressure over Holocaust-era accounts left dormant and heirs turned away, Switzerland's two largest banks agreed to pay 1.25 billion dollars to settle claims brought by survivors and their families. The scandal exposed how the country's banking secrecy had also buried the assets of the murdered. The settlement was one of the first large financial reckonings with Switzerland's wartime conduct.
An independent commission of historians appointed by the Swiss government in 1996 published its findings on the country's conduct in the Second World War. The report documented the trade with Germany, the purchase of looted gold, and a refugee policy that it concluded had turned away people the authorities knew were in mortal danger. It confirmed as a matter of record much of the dark side of wartime neutrality, while leaving the moral verdict for the public to weigh.
The Swiss bank UBS admitted it had helped wealthy Americans hide money from the tax authorities, paid a large penalty and, under pressure, began handing over the names of account holders. The case broke the long-standing wall of banking secrecy for foreign clients. It sharpened a critique that had followed Swiss banking for years: that the vault built on neutrality also served as a haven for tax evasion.
Switzerland began automatically sharing information on foreign residents' bank accounts with dozens of partner countries under an international standard. For foreign clients this effectively ended the banking secrecy that had defined Swiss finance for generations. The change was driven by sustained pressure from the United States and the European Union over tax evasion.