Last month Switzerland broke its two-century political isolation and neutrality. Switzerland has been long known to historians as a politically isolated neutral nation in Western Europe. This small Alpine nation has for long been entrusted with special international functions, including acting as a mediator in conflicts and becoming the host nation for the Biden-Putin Summit in the month of June of 2021. The Swiss had for days held off on following the West to sanction Russia, citing the nation’s long-standing role as a neutral and diplomacy-focused country. “We are in an extraordinary situation where extraordinary measures could be decided,” President Ignazio Cassis told reporters Monday. He said only history would tell if Switzerland would ever do the same again. Swiss neutrality remained intact, he insisted, but “of course, we stand on the side of Western values.” “The attack of Russia against an independent European country — Ukraine — is an attack on sovereignty, freedom, democracy, the civil population, and the institutions of a free country,” Cassis said. Now if Switzerland is such a small country, why is that important? Switzerland has long been a holder of Russian banks and holds a large percentage of the wealth of Russian oligarchs and citizens. By sanctioning Russia and Belarus, a lot of the bank accounts in Switzerland owned by Russian citizens and primarily Russian oligarchs froze. When bank accounts are frozen, you can’t take the money out of the frozen bank accounts. According to Bloomberg and Reuters, “The Swiss Bankers Association (SBA) estimated that the banks hold between 150 billion and 200 billion Swiss francs ($213 billion) of Russian client money in offshore accounts. This indicates that the extent of wealthy Russians’ business with banks in Switzerland, the world’s biggest center for offshore wealth, is far more extensive than the on-balance sheet exposures several of its financial firms have begun to detail.” Switzerland holds so much offshore wealth not just for Russia but for the world, just by being neutral. Because Switzerland sanctioned Russia and Belarus, a lot of money held by Switzerland for Russians and Belarusians is now locked until the sanctions end. It has been catastrophic for the Russian and Belarusian economies. It has caused chaos across the countries with increased inflation, chaos in banks, and so many other negative effects. While Switzerland is a small isolated nation, its role in the international peace movement is very important.
By Caleb Lee, Foreign Politics Journalist of LORP News
Foreign Politics, Economics