Belgium (Brussels Morning Newspaper), Switzerland’s political non-partisanship dates back to the 1815 Vienna Congress, when its position as a neutral state “in the true interest of the whole of Europe.” was signed. However, the role of a mediator in international conflicts stayed with it.
After the beginning of the Russian-Ukrainian war Switzerland’s policy changed its trajectory for the first time in more than two centuries. “Of course, we stand on the side of Western values”- said President Ignazio Cassis some days after the war started. Swiss government promised to stop flights from the Russian Federation, to impose sanctions on some Russian oligarchs close to President Vladimir Putin, as well as to impose sanctions on Vladimir Putin himself.
Did Switzerland keep its promises? Yes, it is. On the 28th of February 2022, Switzerland adopted EU sanctions against Russia, which included: financial sanctions on Russian President Vladimir Putin, Prime Minister Mikhail Mishustin, and Foreign Minister Sergey Lavrov, a ban on imports, exports, and investments of Donetsk and Luhansk regions, which were no longer under the control of the Ukrainian government, closure of Switzerland’s airspace for all Russian flights except flights for humanitarian, medical or diplomatic purposes.
In addition, Switzerland pledged to deliver around 25 tonnes of relief supplies with the Swiss Humanitarian Aid Unit accompanying the aid shipment to the Polish capital Warsaw for the Ukrainian population.
In this year, Switzerland has frozen $8.8 billion of Russian assets in its banks. This is not the first time assets belonging to Russians were frozen by Swiss banks during the Russian-Ukrainian war. It was done in April 2022, when $8 billion of assets were frozen under sanctions against Russians. Moreover, in December 2023 Switzerland also blocked the movement of 7.4 billion francs in foreign currency assets belonging to the Russian central bank.
However, President Ignazio Casis’s claim that Russian assets “could be used to rebuild Ukraine” transformed into the interpretation that it could be a “dangerous precedent”. This shift in the position concerning the war shows us that applying Western sanctions and sending humanitarian aid to Ukraine does not mean that Switzerland is pro-Ukraine. Switzerland is considering its position according to its benefits. Swiss banks were always the most trusted in the whole world, and if the majority of the nowadays world stays for Ukraine, it has to stay with them.
On one hand, there is a desire not to disrupt relations with the United States and Europe, possibly due to diplomatic or economic considerations. On the other hand, there is a commitment to maintaining a reputation as a secure destination for global assets, free from arbitrary measures.
This delicate balance suggests the need to navigate international relationships while safeguarding the entity’s standing as a secure and reliable destination for financial assets. An incorrectly chosen side (at the moment, the correct one means the voice of the majority of states in the international arena and the decisions of the world-leading countries) can have
negative consequences not only on the country’s economy but also on the attitude of its neighbors, allies, and enemies towards it. Hungary can be a good example.
Hungary’s President, Victor Orban, expressed his disapproval of Russia’s attack on Ukraine at the beginning of the conflict and mentioned that he respects Ukraine’s right to defend itself. Though, even though Hungary is a member of the European Union, this did not prevent Viktor Orbán from changing his policy towards Ukraine. Hungary didn’t join the EU sanctions against Russia, it vetoed EU aid packages to Ukraine and transportation of military supplies to Ukraine through its territory and vetoed applications of Finland and Sweden to join the European Union.
Such kind of attitude could not go unnoticed. Foreign direct investment to the country has fallen to –7.8% of GDP in 2022, it faced almost total isolation and untrust in the eyes of its allies. Economic growth is negative, and the upcoming parliamentary elections are instilling fear in the current president, as the “Democratic Coalition” (main opposition party) has a great chance to take the majority in the Parliament.
The second reason for the unstable political position of Switzerland in Russia is its law. The decision to freeze Russian assets in Swiss banks goes against its constitution due to which “The right to own property and economic freedom are guaranteed” and “the freedom to pursue a private economic activity”. That is why the claim of the Swiss president to use Russian funds to rebuild Ukraine is illegal. Furthermore, other states did not start to freeze Russian assets and use them for the reconstruction of Ukraine either, except Canada and Croatia. The discussion on that topic is still ongoing. Due to this fact, another question is coming out:
Why freezing Russian funds in Swiss banks is so important for the European Union? Because from the beginning of the Russian-Ukrainian war, Russian oligarchs stashed away billions of dollars in Swiss accounts. Additionally, the Russian Central Bank also uses Swiss bank accounts. A fact sheet from Switzerland’s State Secretariat for International Financial Matters states that up to 2% of Russian central bank funds are located in Switzerland.
In summary, Switzerland’s posture in the Russian-Ukrainian conflict is unstable, but explainable. As any other sovereign country, Switzerland acts bearing its interests as a state in mind. Knowing that if it takes the wrong side, it could lose its position as the world’s banking leader, Switzerland joins the opinion of the collective West. As we see, not in every conflict there is a possibility to stay neutral and Switzerland proves it.
