Eurosceptic Swiss count their blessings By Imogen Foulkes

BBC News, Bern Published duration 9 August 2010

image caption Swiss shoppers are flooding over their borders to exploit the weaker euro

Switzerland is the small exception in a united - and ever bigger - Europe.

The Swiss voted way back in 1992 not to join the European Economic Area, a first step towards joining the European Union.

The majority against was tiny, however, just 50.3% against the EEA and 49.7 % in favour. Ever since, Swiss public opinion has been divided over the question of how close to get to Brussels.

Now though, as many European countries announce major cutbacks, Switzerland's continued prosperity is making many Swiss believe their "no" to Europe was the right decision.

"We have got high wages by European standards, and low interest rates and mortgages," explains Stefan Meierhans of Switzerland's price monitoring office.

"Also a VAT rate of 7.6% when the EU minimum is 15%," he adds.

All reasons for the Swiss to count their good fortune, but now there is another one too.

Hanging on to the Swiss franc has made the currency a safe haven over the past 12 months as the euro weakened. Imports to Switzerland from EU countries are falling in price and Swiss consumers are benefiting.

What's more, long-standing laws in Switzerland that prevent both the federal government and the cantons from running up big debts mean that, unlike in many of Switzerland's neighbours, there are no huge public deficits to cope with and therefore no big austerity measures.

"Over the last 12 months the cost of living index has gone down by half-a-per-cent," says Mr Meierhans.

"So that means life has become cheaper in Switzerland."

Consumer boom

A trip to the shopping centres of any Swiss town or city this summer reveals plenty of bargains and plenty of happy customers.

Retailers selling European cars are offering "Eurobonuses", a rebate of up to SFr2,000 (1,450 euros; $1,900; £1,200) on purchases of new cars.

Groceries from the eurozone have come down in price too. Christian Guggisberg, food and beverage purchaser for the Co-op chain, has been able to offer reductions of 20% and more on hundreds of items.

"We have seen a very significant fall in the value of the euro against the Swiss franc and we are passing on the advantage to our customers," he explains.

Swiss holiday makers are especially happy. Right across Europe their francs are stretching further, and anyone buying a holiday in the eurozone from a Swiss travel agent can expect reductions.

"Right now the most popular destinations are in Europe," says Iris Jager of Kuoni.

"Greece, Spain and Italy are all very popular. We are negotiating every week with the hotels on our books and prices are coming down."

"For instance this week I can offer you a four-star hotel in Sardinia, right on the beach, the beautiful Gulf of Marinella, half board one week, discount of 700 francs (500 euros)."

Strong franc downside

But there may be a downside to all this prosperity. The strong franc may make Swiss exports to the EU more expensive.

Leaders of the Swiss manufacturing industry are worried about this and have welcomed the Swiss National Bank's decision to buy euros in a bid to stop the franc rising too far.

However, many Swiss companies were already prepared for the current situation. They began trading only in euros with eurozone countries several years ago and have therefore been able to avoid at least some losses caused by currency fluctuation.

But the Swiss tourism industry is facing problems. The weak euro and the weak pound have turned Switzerland into an especially expensive holiday destination for EU citizens.

Perhaps the biggest effect of the crisis in the eurozone has been to reinforce Swiss doubts about the European Union.

image caption Greece's economic problems have caused widespread protests

"Attitudes are worse than ever," says political scientist Professor Dieter Freiburghaus.

"Now only 30% of Swiss people would be ready to adhere to the European Union. It used to be much higher, 50%, now it's very low and it's quite understandable. The euro is of no interest to us, and the whole European project doesn't seem to be functioning very well."

Professor Freiburghaus believes the spectre of EU member Greece on the verge of bankruptcy has bolstered a long and deeply held Swiss belief that going it alone is often the wisest policy.

"There is a cultural gap between Brussels and Switzerland," he explains. "Swiss people like things to be small, Brussels likes things to be big. Swiss people like things to be different from canton to canton, Brussels likes everything to be the same.

"And Swiss people don't feel alone," he continues. "Or I might say they feel better when they are alone. It's a very long tradition, and to change that, to say well we should join, we should be part of it, we should have friends everywhere, that is not our attitude."

In fact Switzerland's position outside the EU is not as clear cut as it might seem. Gaining access to EU markets has required Switzerland to adopt large sections of EU policy in all sorts of areas from transport, to agriculture, to the free movement of labour.

Nevertheless Stefan Meierhans believes Switzerland may now have got as close as it is ever likely to get to Brussels.

"Maybe we fool ourselves a bit that we are completely independent," he admits.