Swiss political system

Switzerland is a neutral country that belongs to the European Schengen area, but is not a member of the European Union and does not belong to the Eurozone. On the other hand, it is one of the richest countries in the world.

The most significant difference in Swiss democracy compared to Finland is that in Finland the parliament prepares the content of the laws and approves them themselves. In Switzerland, citizens have the right of veto.

One example of the Swiss’s greater opportunities for influence

We in Finland have the opportunity to submit a legislative initiative to the parliament by gathering 50,000 supporters, but the members of parliament decide whether it will be discussed or not. Or if they do, they decide whether or not to make it law.

The Swiss have the right to subject the law to a referendum before it enters into force. There is also the possibility of repealing an already valid law. By collecting 50,000 names behind the proposal, the administration must take the issue to a referendum. There, the same possibility also applies to the decisions of regional administrations and municipal councils.

The Swiss also have the option to change the constitution.
It can be achieved by collecting 100,000 names in 18 months behind the change proposal and it must be submitted to a referendum.

Comparison Finland vs. Switzerland

– Inhabitants: Switzerland 8.6 million, Finland 5.6 million.

– Currency: Swiss franc, Euro in Finland (1 franc = 1 euro on January 13, 2023)

– Switzerland’s gross domestic product per inhabitant is almost twice as large as Finland’s.

– The debt of the Swiss government at the end of 2021 was 42.6% of the gross domestic product.

– Finland’s government debt was 50.9%/GDP at the end of 2021.

Although Switzerland’s debt per inhabitant is higher than Finland’s in monetary terms, it is still not in relation to wages. In addition, due to low taxation, they have the liquidity to pay both taxes and their own living expenses.

It is different in Finland.

With high taxation, citizens’ purchasing power and ability to pay taxes have been pushed to the limit. Some of them, like the state, are also over-indebted in an effort to maintain their standard of living.

In Switzerland, the average salary of employees is almost double compared to Finland

Although the cost of living in Switzerland is well above the EU average, it still doesn’t matter because of the high earnings and low income tax. In Finland, the taxation of salaries is more than double compared to Switzerland.

Payroll taxation in Finland (a few examples)

Annual salary Tax rate
  15,000  8.7%
  50,000  31.6%
100,000  42.1%
140,000  47.0%

Considering the difference in living costs, a salary of 140,000 euros in Finland is equivalent to a salary of around 200,000 francs in Switzerland. A person living there alone is taxed at around 20%. About 15% from a parent of a one-child family.

In Switzerland, the state and regional government (Canton) tax is levied on salaries, which includes the tax of the municipality of residence.

Social security

– In Finland, the average occupational pension insurance premium is 24.85% of salary.
– In addition, there are a variety of other social security payments:

– In Switzerland, social security contributions including pension insurance contributions are a total of 10.6%.

– Finland’s pension assets at the end of 2021 were 257.5 billion euros.
– At the end of 2020, Swiss pension assets were more than 1,000 billion Swiss francs.

A better standard of living is also reflected in the value added tax rate

The standard VAT tax rate in Switzerland is 7.7%. A lower 3.7% tax is levied on the hotel sector. Food, books, and newspapers are taxed at 2.5%, while medical, educational, and cultural services are exempt from VAT.

The 24% VAT rate is the general tax rate in Finland.
The 14% VAT rate includes food, animal feed, and restaurant and catering services. (excluding alcohol and tobacco products and tap water)
The 10% tax rate applies to numerous products and services, such as: books, medicines, sports services, movie tickets, entrance fees to cultural and entertainment events, passenger transport, accommodation services and compensation received from television and broadcasting activities.
0%, i.e. the so-called zero tax rate includes e.g. export outside the EU area and the sale of goods to EU countries to buyers liable for VAT.

Other things worth noting

– The number of public sector employees out of the total workforce.
Finland 26.1% (2019) Switzerland 16.0% (2021)

Reijo Lahdenperä



Switzerland’s administrative system is unique in the world 

Switzerland does not have an actual head of state, but executive power is exercised by a seven-member federal council, whose chairman, the federal president, is elected from one of the members for a one-year term.

The bicameral parliament, or federal assembly, governs together with the Swiss who vote in referendums. The Federal Assembly has the right to legislate, but a large part of the laws go through the approval process in a referendum. The 200 members of the National Council, i.e. the lower house, are mostly elected by proportional representation. The exception is six cantons with a small population, from which only one representative is elected by majority vote. The 46 members of the Upper House – one from the former half-cantons and two from the other cantons – are elected by direct majority vote. The term of office in both chambers is four years.

Swiss women gained the right to vote in federal elections in 1971, one of the last countries in Europe. Even in the 1959 referendum, the right to vote was rejected by 67 percent of those who voted against the law change. At the cantonal level, women’s suffrage extended to the whole of Switzerland in 1990, when the women of Appenzell Innerrhoden got the right to vote after the federal court interpreted the local legislation as unconstitutional.

Direct democracy

Landsgemeinde is an old form of direct democracy. It is still practiced in two cantons.
Swiss citizens live under the influence of three jurisdictions, i.e. municipal, cantonal and federal legislation. Already in the constitution of the confederation in 1848, a system of direct democracy was defined (which is sometimes called only semi-direct or representative direct democracy, because it is supplemented by the more usual institutions of parliamentary democracy). The tools of direct democracy (civil rights, Volksrechte, droits civiques) are the right to initiate the constitution initiative and the right to a referendum (referendum) at the federal level. Both can overturn decisions made by the Parliament. Similar methods are also in use at the level of cantons and municipalities.

By requiring the law to be put to a federation-wide referendum, a group of citizens can question a law that has already been approved by parliament if it collects at least 50,000 signatures against the law within 100 days. In this case, a nationwide voting day is agreed upon, when those entitled to vote decide on the final approval of the law by a qualified majority. The vote can also be held at the joint request of the eight cantons.

Similarly, the constitutional initiative allows citizens to vote at the federal level on an amendment to the constitution if they can collect 100,000 signatures of eligible voters in favor of the amendment within 18 months. Parliament can make a counter-proposal to the proposed amendment, in which case on election day the voters must mark on the ballot for both the proposal and the counter-proposal, whether they support them and also mark which proposal they support if both are approved. Amendments to the constitution must be approved by a double majority (federation-wide referendum and a majority of the voting results of the various cantons).

At the level of the cantons and municipalities, it is possible to vote in a similar way on changes to laws and also on economic decisions, such as changes to taxation or large public construction projects. The number of signatures required for voting varies locally.

Foreign relations and international institutions

Switzerland has long avoided entering into alliances that might require direct military, political or economic action. The country has been practically neutral since 1515. Other European powers recognized its neutrality already after the Napoleonic wars in 1815. Switzerland did not become a member of the United Nations until September 10, 2002. In the referendum held in March 2002, 54 percent of the citizens had voted for joining. Switzerland has diplomatic relations with almost all countries, and historically the country has often acted as a mediator in international disputes. The country does not belong to the European Union; the Swiss have rejected coalition membership in related referendums. However, Switzerland has concluded several sector-specific bilateral agreements with the EU.

An unusually large number of international organizations have established their bases in Switzerland, partly because of the country’s neutrality. The international movement of the Red Cross and Red Crescent was born in Geneva, and although Switzerland is one of the newest member states of the United Nations, the Geneva Palace of Nations is the organization’s second most important headquarters after the New York headquarters. It originally served as the headquarters of the League of Nations. In addition to the European headquarters, Switzerland is home to many other UN organizations, such as the World Health Organization (WHO) and the International Telecommunication Union (ITU) – in total, approximately 200 international organizations operate in Geneva. The city is home to the headquarters of the European Broadcasting Union and the World Economic Forum, best known for its annual conference in Davos, where politicians and economic leaders discuss world issues.

In addition, several sports organizations operate in different parts of Switzerland. The headquarters of the FIBA basketball federation is in Geneva, the headquarters of the UEFA (Union of European Football Associations) are in Nyon, the headquarters of the FIFA (Fédération Internationale de Football Association) and the IIHF (International Ice Hockey Federation) are in Zurich, the Union Cycliste Internationale is located in Aigle, the International Olympic Committee operates in Lausanne and so on.

Army and conscription

The armed forces of Switzerland consist of ground forces and air forces (Schweizer Luftwaffe). Since 2005, the Swiss Armed Forces have supported the EU peacekeepers’ EUFOR mission in Bosnia-Herzegovina with their Cougar helicopters. In the September 2014 referendum, more than 73 percent of the voters supported maintaining conscription.

The cantons organize conscription, and written instructions about serving in the army, civil defense or civil service are sent to all 16-year-olds, including women. After turning 18, men and volunteer women participate in a one-day information session, where they are told about the different options for military service. The service is performed either as armed in the ground or air forces, as civil service or in civil protection. Those who do not do any of the above will pay an additional tax of three percent until the age of 30, excluding the severely disabled.

About 60 percent of Swiss men do military service. In Switzerland, much has been invested in civil protection. Civil protection facilities are of high quality, and around 17 percent of conscripts are trained for civil protection duties.

The Swiss Army has a unique policy regarding weapons. The country’s army is based on a system where reservists keep their personal weapons at home even after military service during the period between refresher exercises. The conscript training itself consists of one basic training period of 90 days and then refresher periods of about three weeks every two years until the age of 42. In practice, this means that a large proportion of men under the age of 42 have an assault rifle at home. Since 2007, however, ammunition is no longer stored at home, with some exceptions. There is no national gun registry in the country, but it is estimated that there are 2–3 million firearms in homes.


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