Not so mighty men
WEF founder floundering, a vote for the ages, vegan decision
Dear Insider,
Man’s power has its limits.
History continues to remind us of this lesson. Not that we like to remember it - except when it brings that special kind of joy that requires you to speak a single word of German:
Schadenfreude
For many on the right side of the political spectrum, that was the sentiment at the news of Klaus Schwab’s announcement this week.
But if one man’s fall seems to teach us that all men and women are equal - the Swiss Federal Council’s decision on an important upcoming referendum puts that truth in a somewhat different light.
Read on to find out why…
Enjoy,
Ian
PS - I help people understand Switzerland with more detailed insights on banks, private business clubs, asset managers, startup CEOs and young Swiss millionaires - would you like to read more articles like these?
Let me know!
💥Quick hits
News bits and bites…short and (sometimes) sweet
The immigration merry-go-round
Is the “Swiss immigration crisis” overblown?
Often forgotten - or intentionally overlooked - in the debate about the rising population of Switzerland is one simple fact:
Between 2013 and 2022, for every three foreigners who arrived in Switzerland, roughly two departed - a ratio that positions the country above the European average for return migration.
Return migration rates dipped notably at the beginning of the Ukraine conflict. But they have since begun to recover, rising from 40 to 50 returns per 100 arrivals between 2023 and 2024.
Plugging the (middle) gap
The Swiss political landscape is poised for a significant shift as Philipp Matthias Bregy emerges as the sole candidate to lead Die Mitte (The Centre), one of Switzerland's major centrist parties.
The announcement comes as the party's current president, Gerhard Pfister, prepares to step down at the end of June.
A lawyer by education, he has served as a National Councillor since 2019 and currently chairs the party's parliamentary group, a position he has held since May 2021.
The unopposed nomination raises additional questions about the strength of The Centre party - it recently had trouble fielding candidates for its Federal Council seat.
Should he secure the presidency as expected at the party's delegate assembly on June 28th.
That means The Centre will have another gap to fill - its parliamentary group leader.
📰 Person in the news: Klaus Schwab
His bald head is known the world over. His thick German accent as well.
Since founding the World Economic Forum in 1971, Klaus Schwab has made himself one of most indispensable figures in global business and politics.
Or so he thought…
In a surprise move, Schwab last week resigned as chairman amid serious allegations of financial and ethical misconduct. Whistleblowers accuse Schwab and his wife, Hilde, of misusing WEF funds for personal benefits, including luxury travel and private services.
But that’s not all…
Schwab allegedly manipulated the WEF's Global Competitiveness Report to favor certain governments and sought personal accolades like the Nobel Peace Prize.
In response, the WEF has launched an independent investigation, and former Nestlé CEO Peter Brabeck-Letmathe has been appointed as interim chair.
One vote to rule them all
It was a controversial decision - and by all accounts a close vote.
The Swiss Federal Council announced this week that an eventual referendum on accepting the new Swiss-EU bilateral agreement would be limited to a “facultative” referendum, not an “obligatory” vote.
What does this mean?
In short - a simple vote, as will be called for in this case, requires only a majority of voters to approve the topic in question.
An obligatory vote would add a second layer of complexity - a required majority of cantons to also vote in favor of the agreement.
Reports indicate that the decision was taken by a close margin of 4-3 among the Federal Councillors, with Foreign Minister Ignazio Cassis (FDP) joined by Socialist Party colleagues Beat Jans and Elisabeth Baume-Schneider as well as Centre Party Martin Pfsiter in favor.
Cassis’s fellow FDP councillor Karin Keller-Sutter and the two Swiss People’s Party representatives Guy Parmelin and Albert Rösti came out against the move.
Cassis, whose main focus over the last years has been shepherding the agreement negotiations to a successful conclusion, emphasized that this decision aligns with Switzerland's established practice, as seen in previous agreements like Schengen/Dublin.
Opponents, including the Swiss People's Party (SVP) and the "Kompass Europa" initiative, argue that such significant treaties should require a double majority. They contend that the new agreements involve dynamic EU law adoption, which they believe warrants stricter approval criteria.
The initiative is collecting signatures to potentially challenge the Federal Council's decision.
At what price?
Tariffs are on everyone’s minds these days.
So far, Switzerland seems to have wiggled its way into Donald Trump’s better graces, with a good perspective to avoid the punitive 32% fees the Administration originally proposed - thanks to a timely phone call, a personal visit in Washington and some handshaking at Pope Francis’s funeral last weekend.
Good thing - because the numbers are in and they don’t look good.
A complete breakdown of the potential tariff hit by Swiss canton paints a very clear picture:
Basel-Stadt leads in absolute exports to the U.S., with CHF 16.1 billion in 2023, primarily due to its pharmaceutical industry, including giants like Roche and Novartis.
Nidwalden is highly dependent on the U.S. market, with over 40% of its exports directed there, largely from Pilatus Aircraft. The canton faces significant risk from potential tariff increases.
Watchmaking regions such as Geneva, Jura, Neuchâtel, Schaffhausen, and Bern are vulnerable, as luxury watches are subject to tariffs and face declining demand in key markets like the U.S. and China.
Cantons Neuchatel and Ticino also have substantial exports to the U.S., over CHF 6 billion each, mainly due to their gold refining activities.
Check out the Swiss Insider special report on the Swiss Gold Industry for more details on what make Neuchatel and Ticino especially exposed to the US market.
A Chart is Worth…
Do Swiss people like organic food? Yes - up to a point. Recent statistics (below) indicated that expenditure has tapered off…
The Bonus
🐓 No chickens planted - A Swiss court has ruled against producers of plant-based products meant to act as meat substitutes, declaring that non-meat products may not - as in the case of “planted chicken” - use the meat term in their products’ names. (Link)
🪖 Standing together - The Mechanised Brigade 11 with 1’000 Swiss soldiers is participating in exercises with Austrian and German troops. The exercises have been marred by multiple embarrassing accidents. (Link)
🤑 Show me the money - A new study by VZ Vermögenszentrum shows that the majority of new Swiss pensioners prefer to withdraw their pension capital - for fear of receiving a lower monthly pension, not for tax reasons. (Link)
🥚 Egging up - The consumption of eggs in Switzerland has risen sharply, by over 1 egg per person/year to an estimated 198 eggs per year. The Swiss Federal Council has reacted by loosening import restrictions. (Link)