Iceland: “The EU Mobbed Too Hard!”

Why Switzerland needs an aggressive economic diplomacy …

by Beat Kappeler

If you listen to the people in our country, a lot of them suffer from the Federal Council, who  is being double-crossed all the time regarding foreign policy. Particularly foreign economic foreign policy has become short of breath.
In two cases there has been criticism here. It was slavish to let themselves be rejected by the G20 but to grant 10 million to the International Monetary Fund immediately afterwards.,No tax without having a say in it, that had been the slogan of the American Revolution and this would aptly fit the Swiss diplomacy. Furthermore, nobody reminds the French and US Americans of the fact that as well may order our warplanes elsewhere, e.g. in Sweden; if they want to continue pestering us.
Such blunder comes about because the Federal Council does not act as a government but as a stiff club of administration heads who hide behind their old wooden desks in the Federal Council chamber. The trendy new years photograph seem like a propaganda lie.
Three  examples of a good economic foreign policy are to be lined out in the following:
At present Iceland quarrels with Great Britain and the Netherlands about their billion euro credit by means of which Iceland was demanded to reimburse all depositors of the bankrupt Icelandic banks. Iceland’s President blocked, first of all the Icelanders will go to the ballots, possibly they will reject the payment and simultaneously the access to the European Union.
The EU mobbed too hard – a feeling that Switzerland is familiar with as well. However, Switzerland and Norway should help the Icelanders in this situation and give them encouragement. That would give cohesion to the EFTA. This free trade area is vital, it settles agreements all over the world, and Switzerland must not let it further crumble. Last week the Swiss TV in its “Tagesschau” prophesized the end of the alliance within 50 years, instead of giving information. Furthermore, Councilor of State Sommaruga once more offered the EU as an alternative without any contradiction.
A help for Iceland could also show the British and the Dutch that Switzerland on her part is well able to become disagreeable. In the end there will be an agreement but on a better level. Be obstructive and you will be somebody. Inquiries, however, at the three responsible departments of Foreign Policy, of Economics, and of Finances generated a deplorable picture: “There was no request from Iceland”, was one answer. “One should enquire in the other department”, was another answer. In short: Passivity, surprise, but no policy planning. The second example of an economic foreign policy was the tax dispute with the EU. A negotiation detail with Italy at the last October gives a deep inside: Insubordinate Italian Minister of Finance Giulio Tremonti wanted to be vice prime minister. This angered Silvio Berlusconi and made him express publicly that we would like to get rid of him. Just then the Swiss Department of Finance declared they wanted to solve the dispute diplomatically and this way backed up Tremonti. Had Switzerland brought the big guns in immediately, Tremonti’s chair would have toppled and may be the archenemy had tumbled. The big guns were brought in at last, but four days later: the tax dossier was suspended. At that time, however, Berlusconi and Tremonti had already got together, again, and Italy’s government was united – and stayed rigid.
What would a good foreign economic policy look like? First of all it would require a certain structure, which was destroyed by resigned Federal Councilor Pascal Couchepin in 1999 – the Federal Department for Foreign Economy (BAWI) . This department with a special secretary of state as the highest trading diplomat was a centre of competence with their own experts in currency, trade, development, agriculture and energy issues. The other departments did not like this coordinating BAWI because it interfered. Furthermore, it was a cadre-training unit for state and economy. However, the BAWI succeeded in bringing about this cohesion of foreign economic policy, which the Federal Council was not able to create.
Professor Dieter Freiburghaus, who also complained about the BAWI’s dismantlement points to a second aspect of international diplomatic successes – cross compromises. If Federal Councilors negotiate only for their own department, they may never connect two issues – as was the case with the G20 and the IMF billions or with taxes and combat jets.
President Vaclav Klaus gave an example when he signed the new EU treaty for the Czech Republic only under the condition that he was freed of the Sudeten Germans’ demands. Swiss negotiators feel that such procedures are unfair. But in the tax quarrel, Germany, the EU and the US threatened Switzerland exactly with such chicaneries.
Third, the Federal council has to become a government that will get together for half an hour every day or meets for telephone conferences. Even better would be a President in office for several years, without being head of a department and endowed with the right to set the agenda.
Lacking all this, the Federal Council will stay what it has been up to now in the eyes of innumerable citizens: A major source of irritation about the otherwise rather happy country and its politics. Its behaviour is damaging for the country. The future ambassador to Berlin, Tim Guldimann, demanded the dismissal of the small-state-complex in the same issue of the “Schweizer Monatshefte”, in which Freiburghaus had published his article. Mores self-confidence, that is correct, but also the suitable instruments.    •

Source: Sunday NZZ of 10 January 2010

Beat Kappeler was a freelance journalist from 1977 to 1992, Secretary of the Association of Unions, then team member of the Weltwoche and author for Sunday NZZ since 2002. From 1996 to 2000, he taught social policy as a professor at the university of Lausanne, in 1999 he was doctor h.c. at the university of Basel and from 1998 to 2007 member of the Federal Communications Commission. He has published several books.