Everything you need to know about Switzerland’s referendum to ban military exports

Swiss voters will go to the polls on Sunday to decide on whether to ban military exports and other war materials.

Everything you need to know about Switzerland's referendum to ban military exports
Two campaign banners reading "Responsible business initiative, Yes!" (L) and "Yes to the initiative against investments in weapon firms".Photo: FABRICE COFFRINI / AFP

Swiss voters will decide Sunday whether to ban funding companies that make weapons and other war materials, in a move that could block billions of dollars worth of investments.

The famously neutral country, which has not been to war in centuries, already bans the production of nuclear, biological and chemical weapons, as well as landmines and cluster munitions.

But a coalition of peace groups and left-leaning parties insist that those laws do not go far enough.

They are seeking a constitutional amendment making it illegal to finance any companies that make any form of war material, including assault rifles, tanks and their components.

As part of Switzerland's system of direct democracy, their initiative will be among the issues put to a vote on Sunday.

The initiative, which is opposed by the government and parliament, appears unlikely to pass, with the latest poll showing only 41 percent of those questioned were in favour.

EXPLAINED: What's at stake in Switzerland's November referendums?

But it has certainly stirred up tensions in Switzerland.

It would bar the Swiss central bank and pension funds from investing in companies that make more than five percent of revenues from sales of war material.

Meanwhile the arms makers would be denied credit lines in Switzerland.

'Swiss money kills'

That could have a big impact.

According to a report earlier this month by research group Profundo, the central bank, large banks like UBS and Credit Suisse and other Swiss financial institutions currently have nearly $11 billion worth of loans and investments in arms companies, including BAE Systems, Lockheed Martin and Northrop.

Backers of the initiative stress that while Switzerland does not participate as a country in armed conflicts, its financial sector does, insisting that investing in arms companies is “incompatible” with Swiss neutrality.

“Swiss money kills”, reads one of the posters in favour of the initiative, featuring an origami tank made out of a 100 Swiss franc banknote.

READ: Everything you need to know about Switzerland's 'corporate responsibility' referendum 

The Swiss government and parliament meanwhile insist the country's current legislation is sufficient, warning that the requested constitutional amendment “goes too far”.

The narrow definition of what constitutes a weapons company, they caution, would effectively block funding of civil aviation companies such as Boeing, Airbus and Rolls Royce.

The initiative “would not avert wars, (but) would diminish yields from social security and retirement funds,” the government has cautioned.

The initiative, it adds, also “threatens the Swiss finance sector and would weaken Swiss industry and its small- and medium-size companies.”

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Swiss decision to purchase US fighter jets could force second referendum

Switzerland's decision to purchase US-made fighter jets could be put to a referendum,

Swiss decision to purchase US fighter jets could force second referendum
Swiss fighter jets. Photo: JOE KLAMAR / AFP

Switzerland’s government on Wednesday backed the purchase of 36 F-35A fighter jets from Lockheed Martin to replace its fleet and five Patriot air defence units from fellow US manufacturer Raytheon.

Switzerland’s current air defence equipment will reach the end of its service life in 2030 and has been undergoing a long and hotly-contested search for replacements.

“The Federal Council is confident that these two systems are the most suitable for protecting the Swiss population from air threats in the future,” the government said in a statement.

‘No Trump fighter jets’: Swiss don’t want to buy American planes

The decision will now be put to the Swiss parliament — and also risks being challenged at the ballot box, with left-wingers and an anti-militarist group looking to garner enough signatures to trigger a public vote.

The F-35A was chosen ahead of the Airbus Eurofighter; the F/A-18 Super Hornet by Boeing; and French firm Dassault’s Rafale.

For the ground-based air defence (GBAD) system, Patriot was selected ahead of SAMP/T by France’s Eurosam.

“An evaluation has revealed that these two systems offer the highest overall benefit at the lowest overall cost,” the government statement said. Switzerland is famously neutral. However, its long-standing position is one of armed neutrality and the landlocked European country has mandatory conscription for men.

“A fleet of 36 aircraft would be large enough to cover Switzerland’s airspace protection needs over the longer term in a prolonged situation of heightened tensions,” the government said.

“The air force must be able to ensure that Swiss airspace cannot be used by foreign parties in a military conflict.” 

Long path to decision 

Switzerland began to seek replacements for its ageing fleet of fighter jets more than a decade ago, but the issue has become caught up in a political battle in the wealthy Alpine nation.

The Swiss government has long argued for the need to quickly replace its 30 or so F/A-18 Hornets, which will reach the end of their lifespan in 2030, and the F-5 Tigers, which have been in service for four decades and are not equipped for night flights.

In 2014, the country looked set to purchase 22 Gripen E fighter jets from Swedish group Saab, only to see the public vote against releasing the funds needed to go forward with the multi-billion-dollar deal.

Bern launched a new selection process four years later, and a referendum last year to release six billion Swiss francs ($6.5 billion) for the purchase of the fighters of the government’s choice squeezed through with 50.1 percent of voters in favour.

During the referendum campaign, the government warned that without a swift replacement for its fleet, “Switzerland will no longer be in a position to protect and even less defend its airspace by 2030”.

Currently, the fleet does not have the capacity to support ground troops for reconnaissance missions or to intervene against ground targets.

Meanwhile Switzerland’s current GBAD system is also old and lacks the capacity to meet the widening spectrum of modern threats.

The military currently relies on a range of Rapier and Stinger short-range missiles that have been in service since 1963.