Tag Archives: Swiss

Xhaka vs. Xhaka: Swiss Debates about Immigration and National Identity

The world was watching today as Switzerland and Albania met in a qualifying-round soccer match at the European Championship in France. Switzerland won 1-0. The game got world-wide attention because two brothers were playing on opposite teams: Granit Xhaka for Switzerland and Taulant Xhaka for Albania.

The Xhaka brothers Taulant (left) and Granit embracing before the game. (Screenshot Blick.com)

Whenever US national teams in any sport play in a big tournament, the expectation typically is that the US will win it all–soccer (known was football in the rest of the world) being an exception. Small countries rarely expect their sports teams to win a big tournament. Often, just qualifying for it suffices to get fans excited. When Switzerland beat Spain during the 2010 World Cup, fans were ecstatic. Spain went on to win the World Cup, Switzerland was eliminated because of a loss against Chile and a draw against Honduras, and everybody was happy. So symbolic victories matter and have an afterlife in the psyche of small countries with implications for national identity formation.

For Albania, the game was important because this is the first time ever that the Albanian national team qualified for a big tournament–World Cup or European Championship. To the Albanians, being there was more important than winning. This is why some streets of Zurich were dominated by Albanian immigrants who were in a celebratory mood in spite of the loss of their team. One Albanian fan told the Zurich daily Tages-Anzeiger that Albania was represented at the Euro with 38 players, more than any other country: “We feel like victors because the Swiss national team consists predominantly of Albanians.”

Albanians celebrating: post-game parade in Zurich’s Langstrasse. Some Swiss showing colors as well. (Tages-Anzeiger)

And this is exactly the reason why some Swiss do not feel like celebrating. The Swiss national team over the past few years has become a focal point of the tempestuous debate about immigration, integration, naturalization, and national identity that has been virulent in Switzerland since the early 1970s. When the Swiss Under-17 team unexpectedly won the World Cup in 2009, the Swiss public was surprised to learn that two-thirds of the players on that team had a migration background. Many of these players have now moved up to the senior team.

Of the eleven players in the starting lineup of today’s game, only three do not have a migration background–interestingly the goal keeper and two defenders, while all mid-fielders and strikers do have a migration background. Five players have roots in Albania or in Kosovo (that is ethnically Albanian), and one additional player has roots in Bosnia. So the Albanian fans got it right: they do have reason to celebrate. At the same time, an informal survey of the Swiss tabloid Blick indicates that 58% of its readers do not identify with their national team.

The example of the Xhaka brothers illustrates what has become the norm in Swiss and indeed in European soccer. Both Xhaka brothers were born in Switzerland to Kosovo-Albanian parents who escaped collapsing Yugoslavia in 1989. Both grew up in Basel and learned to play soccer in local clubs. Both profited from the efforts of the Swiss Soccer Federation that since the early 1990s has made it their mission to help integrate the children of immigrants into Swiss society through soccer.

Taulant, born in 1991, still plays for the FC Basel and has collected four Swiss championship trophies with his club. Granit, born in 1992, transferred to Borussia Mönchengladbach, an elite German Bundesliga team, in 2012. Last month, it was announced that he will transfer to Arsenal next season. Both brothers played for Swiss national youth squads, but only Granit was invited to the senior team, while Taulant was invited to play in the Albanian national team in 2013. So Taulant plays for a Swiss club, but for the Albanian national team, while Granit chose a career in the Bundesliga and the Premier League but still plays for the Swiss national team.

Populists vilify both a nascent multicultural society in Switzerland in general and immigrants in particular because of their supposed lack in strength, character, conviction, and commitment to their new country. Commentators from the populist right have denounced prominent Swiss players with a migration background because they allegedly lack loyalty towards their adoptive country as they play for a foreign national team, foreign club team, or both. While native Swiss players enjoy great support for seeking fame and fortune abroad, this is not the case for players with a migration background who play for a foreign club, like Granit, or worse, for a foreign national team, like Taulant. The Xhaka brothers very much represent the globalized cosmopolitan world of elite soccer in Europe, where top teams buy top players regardless of nationality. But a more parochial Swiss public examines ‘their’ players with migration background for their ‘Swissness’ and finds them mostly wanting, as a desire to play abroad is seen as lacking ambition to integrate.

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Split loyalties: mother Xhaka wearing a t-shirt combining the flags of Albania and Switzerland. (Daily Mail Online)

At the 2014 World Cup, the Swiss team was the most cosmopolitan and was widely praised as a model for integration. But recently, questions of integration and identification with Switzerland have flared up within the national team as well. A frustrated Stephan Lichtsteiner, a star player at Juventus Turin and one of the few players without migration background, started the debate when two players with a long history with the national team were cut from the roster for the qualifier against Estonia in March 2015. He angrily told the rightist Basel daily Basler Zeitung: “To me it is not about the`true Swiss’ and the ‘other Swiss,’ rather it is about the question whether people still can identify with the the national team.”

Observers believe that this was a public acknowledgment that a powerful Albanian bloc has emerged in the Swiss national team and that the team is not nearly as integrated as perceived by the public. Lichtsteiner’s statement certainly did not not improve the public image of the Swiss national team at best and played into the populist rhetoric at worst. In that context, Albania was the worst-possible opponent for Switzerland. It is a good thing that the Albanian-Swiss managed to win over the Albanian team–otherwise the public backlash in Switzerland questioning the loyalty of their players would have been palpable. But then these players are professionals who want to play soccer, win games, and be successful in their careers–and who are annoyed about being drawn into integration and identification debates. So the true winners of today’s game: the Xhaka brothers.

Switzerland Discovers the Ugliness of Offshore

In recent days, Johann Schneider-Ammann, the Swiss Minister of Economic Affairs, has become the target of criticism for the tax dealings of the Ammann Group in Langenthal, the company he led between 1987 and 2010. From 1999 to 2010, Schneider-Ammann served in the National Council, the lower chamber of the Swiss parliament. He only gave up control of the Ammann Group when he became a member of the Swiss Federal Council, the federal cabinet, as Minister of Economic Affairs in 2010.

Official 2014 picture of the Swiss Federal Council. Schneider-Ammann is on the left.

The Ammann group was founded in 1869 by an ancestor of Schneider-Ammann’s wife and has been specializing in the production of construction machines. Since 1931, Ammann has been the exclusive importer of Caterpillar products to Switzerland. Today, the company has a worldwide employment of about 3,700–2,500 of them abroad.

Ammann road construction machines (Pavel Ševela / Wikimedia Commons)

One of the allegations, first reported by Swiss TV in late January, is that the Amman Group sold Caterpillar equipment to Iran after the 1979 revolution, thus circumventing the US embargo. Two retired truck drivers, Werner Zwahlen and Robert Z’Rotz, claim to have delivered many truckloads of Caterpillar products to Teheran and Baghdad between 1975 and 1984: “We picked up the machines and spare parts in Belgium and the Netherlands and brought them to Ammann in Langenthal. There we got new papers and, without ever unloading, drove on to Teheran and Baghdad.” As Schneider-Ammann entered the company in a leading position in 1981, it stands to reason that he knew about this scheme–which to be sure was not illegal under Swiss law.

The more serious allegation is that the Ammann Group set up offshore schemes to evade–or avoid–taxation in Switzerland. In 1976, the Ammann Group founded Manilux SA, a financial holding corporation, in Luxemburg. In 1996, they founded another financial subsidiary, Jerfin Ltd., on the Channel island of Jersey. Schneider-Ammann himself was listed as the chief of Manilux which had neither employees nor offices in Luxemburg, nor elsewhere, even though 250 million Swiss Francs were invested there. Manilux and Jerfin were dissolved in 2007 and 2009, respectively, and the funds transferred first to Jersey and then back to Switzerland.

In an interview with the Zurich daily Neue Zürcher Zeitung on February 8, Schneider-Ammann confirmed the basic facts but denied any wrongdoing: “This was about reserves which we optimized in terms of taxation. The funds were intended for the strategic development of the international Ammann Group and were used to protect jobs. Everything was legal, everything was transparent, the taxation authorities had complete insight at any time. They confirmed this to the company again on Friday.” Entrepreneurs today, according to Schneider-Ammann, have to resort to such offshore schemes because companies are part of a global competition where this is standard procedure: “If you want to secure domestic jobs in an international corporation, it is legitimate to optimize taxes. From an entrepreneurial perspective, it would be a mistake not to take advantage of all legal options.”

While many corporations set up much more sophisticated tax avoidance schemes with a more complex web of subsidiaries in numerous jurisdictions, this is a textbook example for how offshore works. “Optimizing” tax liabilities becomes part of what corporate leaders do in order to increase profits or just to remain competitive. At the other end of the bargain, jurisdictions compete to offer the most attractive conditions to get companies to incorporate there. This is the mechanism Schneider-Ammann described quite frankly: “The Ammann group has to compete in a brutal environment. Before the turn of the millennium, this type of a tax break did not exist in Switzerland. That is why it was recommended to us to invest money in offshore corporations to shelter it from taxation. In the last few years, similar tax shelters were created here [in Switzerland]. This is why we brought the money back to Switzerland.”

This is how the offshore race to the bottom works: corporations create shell companies to move their money to the jurisdiction that offers the most advantageous conditions–and ordinary citizens all over the world shoulder an ever-increasing percentage of the tax burden. Jurisdictions in turn adjust their tax schemes to make their location even more attractive to corporations. When Switzerland matched the conditions offered by Luxemburg and Jersey, repatriating the accounts made business sense for the Ammann Group.

So why did revelations about the business practices of their Minister of Economic Affairs create such a stir in Switzerland to the point that some demand his resignation? Switzerland is one of the pioneers of the offshore system and for well over 80 years has created offshore opportunities for corporations and individuals who are based elsewhere. Mr. Schneider-Ammann has delivered a high-profile example for how offshore looks from the point of view of the jurisdiction that gets cannibalized–a perspective the Swiss are not used to seeing. And all of a sudden, it is very easy to comprehend just how wrong and unjust this system is.

The question is not just whether Mr. Schneider-Ammann’s tax schemes were legal but whether a corporate leader who actively pursued offshore strategies to avoid paying corporate taxes in Switzerland can be a trusted guardian of the common good and more specifically is fit to be its Minister of Economic Affairs–who sits at the table when tax issues are discussed with foreign entities. And just perhaps the offshore system has become odious enough for even the Swiss to understand that the global offshore system they helped create–and from which they profited immensely–may be legal but is morally corrupt.

Oprah Creates a Stir: Switzerland’s Small-State Response

In my blog post of August 9, I commented on the Oprah incident in Zurich which has been dubbed Täschligate (handbag-gate) in Switzerland. While “Oprah-Gate” has long been dropped from short-lived news cycles around the world, the story continues to unfold in Switzerland. And here the story becomes interesting: how does a small country process the scolding and humiliation by the global media?

Here is a brief synopsis: Oprah entered an exclusive Zurich boutique, asked to see a very expensive handbag, but being turned down by the sales clerk with the remark that this item would be too expensive for her. This at least is Oprah’s version of the story. The story was picked up by news outlets around the world after Oprah’s high-profile interviews with Entertainment Tonight and with Larry King, and Oprah’s interpretation of this incident as racially motivated was uncritically accepted and disseminated. In my first blog post, I concurred that there was a racial component to the story, and in spite of some unresolved discrepancies I have not changed my mind.

There have been multiple responses in Switzerland, and the bulk of them focused on discrediting Oprah on some level and thus on putting her credibility in question. One commentator bluntly claimed that she couldn’t sing nor act and that her only true skill was self-presentation. The most common response is to frame Oprah as a petulant and narcissistic star who was irritated by the fact that she was not recognized in an upscale boutique–which is used to dealing with celebrities–and that her show does not have any traction in Switzerland.

First, there was a tearjerker of an interview in the Swiss tabloid Blick with the sales clerk–who was idendified as Adriana N.–with the title “I have not been able to sleep for days!” It is a full-blown victim narrative–“I feel like I am in the center of a hurricane.” Adriana remembers that Oprah entered the store accompanied by a man (Oprah claims to have gone shopping alone). In Adriana’s version of the story, she showed Oprah a handbag from the Jennifer Aniston line and explained that they existed in different sizes and materials. In Adriana’s account, Oprah eyed the expensive crocodile skin bag on top of the shelf: “I told her that this is the same bag like the one I was holding in my hand at the time. Only that that one was much more expensive. I would be happy to show her other bags.” The uncontested fact is that Adriana did not take down the expensive bag even though Oprah showed an interest in it and that Adriana tried to steer Oprah towards less expensive bags.

Trudie Götz, the owner of the boutique, in her own interview with Blick, admits that Adriana committed one mistake by not having taken the bag off the shelf and handed it to Oprah. When Adriana mentioned the price to Oprah, she felt bad about it, according to Götz. Why would you feel bad about stating a price in an upscale shop–unless of course you believed that the item was way out of the person’s price range. So Oprah’s reaction seems justified: she indeed was profiled by Adriana and considered not worthy of being shown this very expensive bag. Was racism a factor? Götz, flatly denied that, adding: “I am sorry, but perhaps she [Oprah] is a bit too sensitive in this regard.” Götz unwittingly points to the inverse as the real problem: if you are white, you don’t have to concern yourself with issues of race.

This is the mainstream interpretation of this event in Switzerland. Even the speedy apology to Oprah by Switzerland Tourism, Switzerland’s heavily subsidized tourism office, now is being criticized in Switzerland. Rino Büchel, a member of parliament representing the populist-right Swiss People’s Party (SVP), is demanding to know how this “bizarre apology” came about. Even Daniela Bär, the spokesperson for Switzerland Tourism who had tweeted the apology, is now backpedaling, stating that the apology was premature, too emotional and provided an unfortunate interpretation of the event. Büchel in the meantime increased the pressure by promising a parliamentary investigation of Switzerland Tourism’s original apology, stressing that too many outside of Switzerland were confounding Switzerland Tourism with the country itself and read this as a national admission of guilt. Unfortunately, the headline in Britain’s The Telegraph bears this out: “Switzerland apologises to Oprah Winfrey over handbag incident.” And Politico reported: “The Swiss government and the boutique apologized, trying to tamp down what had a become a worldwide story.”

One of the more bizarre commentaries by Martin Sturzenegger in the Zurich daily Tages-Anzeiger focuses on the object of desire: the handbag, made from crocodile skin and with a SFr. 35,000 ($38,000) price tag. For this handbag, the skins of three crocodiles were used who were raised under horrible conditions in a crocodile farm, as the linked PETA video narrated by actor Joaquin Phoenix graphically shows. Sturzenegger points out that PETA, the animal rights organization, named Oprah the person of the year in 2008 because she made her large audience aware of the systemic abuse of animals in industrial settings. Based on the handbag incident, Heinz Lienhard, the president of the Swiss animal rights organization, declared that Oprah was not a true protector of animals. So Sturzenegger’s take is that Oprah is a phony animal lover with a pathological desire for publicity. The problem with this argument: Oprah just wanted to see the bag; she never expressed the desire to buy it.

The most recent line of argumentation in the Tages_Anzeiger and in Blick is that Oprah created a big stir around this incident to promote the new movie “The Butler” in which she has a starring role. Granted, Oprah knows how to generate publicity and how to stage herself. But the article in Politico–on which this theory is based–more generally argues that “Oprah Winfrey is stepping back into politics,” mentioning her discussion of the Zurich incident as one example and only in passing.

All of these responses are typical for a small state that sees itself exposed to massive criticism from abroad. In moments like these, defending national interests trumps introspection and reasoned debate. Even Martine Brunschwig Graf, the president of the federal commission against racism (Eidgenössische Kommission gegen Rassismus), condemned the efforts by mostly foreign media outlets to turn an ego problem into a racism problem, as she put it.

But in the French-speaking part of Switzerland, the response seems to be more moderate. A piece in the Lausanne daily 24 heures, entitled “Oprah Winfrey finds Switzerland racist, and our black community does as well,” takes this opportunity to reflect on racism in Switzerland. Celeste Ugochukwu, the president of the Conseil de la Diaspora africaine de Suisse (CDAS), stated in the article that racial discrimination was common in Switzerland–but more so in the German-speaking part. André Loembe, vice president of a different immigrant organization, diagnosed a rising anti-Black attitude in Switzerland since the early 2000s. The federal commission against racism in a 2010 report confirmed a rise in anti-Black and anti-Muslim incidents. Loembe further expressed his view that Swiss anti-racism laws should be used to prosecute the sales clerk. If you are black in Switzerland, it is a lot easier to see the racial component of Oprah’s handbag incident.

Some progressive politicians take a more critical perspective as well. In an interview with the German news magazine FOCUS, the social democratic politician Andreas Gross recognized a “combination of an inflated self-importance of being Swiss (Selbstüberwertung des Schweizer-Seins) and a strange provincial attitude in contact with foreigners.” In his view, this paradox between competency in foreign trade and inability to deal with foreigners in their own country is poorly understood in Switzerland and not part of a critical self-examination.

The context of increasing hostility towards immigrants in Switzerland also is hard to overlook. Most notable are popular votes against the construction of new minarets in November 2009 and for tightening asylum laws in June 2013. In July, allegations of inhuman treatment of asylum seekers in some Swiss towns became public. In the affluent town of Bremgarten, for instance, asylum seekers have been banned from the public pool and from local sports facilities–this town of 6,500 people has created a total of 32 exclusion zones where asylum seekers are not allowed to go.

So the Oprah incident is just the tip of the iceberg. It reveals a country that feels pressured by immigration and that is deeply troubled by the rapid demographic transformation unleashed by immigration. It also reveals just how clumsy and insecure the Swiss debate about race is. Moreover, it reveals the typical collective small-state defensive reflexes against any perceived threat from the outside that render a national debate toxic. In a more recent interview, Oprah showed a surprising insight into this issue: “It’s not an indictment against the country or even that store. It was just one person who didn’t want to offer me the opportunity to see the bag. So no apologies necessary from the country of Switzerland. If somebody makes a mistake in the United States do we apologize in front of the whole country? No!” The Swiss would do well to take this to heart.

Marc Rich and Switzerland: An Uneasy Relationship

By sheer coincidence, I arrived in Zug, Switzerland, a couple of days after the passing of Marc Rich (1934-2013) who was one of the world’s foremost commodities traders. It just so happens that this is the city where in 1974 Marc Rich and friends founded Marc Rich + Co AG which specialized in commodities trading. It is no accident that Rich set up his company in Zug which is a business-friendly tax haven cloaked in secrecy, located in a small country that specializes in tax shelters and bank secrecy. Rich sold his company in 1994 which then was renamed Glencore and today is one of the biggest traders in commodities–still based in Zug.

Zug, Switzerland. Humans: 25,000. Corporations: 30,000.

Marc Rich traded with anyone, and he pursued commodities even in countries with very difficult political situations where other traders stayed away. His company also traded with countries under US or international sanctions, such as Cuba, Iran, and South Africa during Apartheid, and with ruthless dictators like Pinochet, Ceausescu, Qaddafi, and others. A congressional investigation revealed that Rich for instance delivered Soviet and Iranian oil to South Africa and traded uranium from Namibia, which then was a South African protectorate, back to the Soviet Union in return. The Shipping Research Bureau in Amsterdam documented 149 oil deliveries to South Africa set up by Marc Rich between 1979 and 1993 in violation of the embargo. These oil deliveries were vital as oil was the only major raw material South Africa did not possess on its own.

Ken Silverstein in his well-researched 2012 profile of Marc Rich in Foreign Policy states that “the real secret to Glencore’s success is operating in markets that scare off more risk-averse companies that fear running afoul of corporate governance laws in the United States and the European Union.” Daniel Ammann, who wrote a Marc Rich biography entitled The King of Oil, in a 2010 interview with Reuters stated that Rich “went where others feared to tread – geographically and morally.” According to CNN Money, Rich was “one of the world’s most famous white-collar criminals,” and the Financial Times more bluntly called Rich a “buccaneering oil trader.”

Marc Rich was indicted in the US in 1983 on more than 50 counts of fraud, racketeering, evading income taxes, and breaking US and UN trade embargoes. At the time, he was considered the biggest tax evader in US history, and dealing with outlaw regimes had turned into his specialty. The FBI put Marc Rich on its most wanted list. In response, Rich renounced his US citizenship in 1984 and hunkered down in Switzerland which proved to be a reliable place of exile. Rich maintained his primary residence in Switzerland, first in Zug and then in nearby Meggen, until his death earlier this week. His exile only ended when President Bill Clinton pardoned Marc Rich on his last day in office on January 20, 2001–an act that left a stain on Clinton’s legacy. The record shows that influential politicians of another small state, Israel, had lobbied on Rich’s behalf, including Ehud Barak and Schimon Peres. In spite of Clinton’s pardon, Rich never dared to return to the United States out of fear that US officials would file charges not covered by the pardon.

But the question of interest here is why Switzerland offered Marc Rich a safe haven during his years as a refugee from the law. I see four major factors. Perhaps most importantly, Switzerland makes a distinction between tax evasion and tax fraud. Only tax fraud is considered a felony, while tax evasion, no matter the amount and degree of criminal intent, remains a minor civil offense not unlike a parking ticket. While most of the civilized world sees this as an artificial and self-serving distinction, it prevented Marc Rich from being extradited to the United States. This issue, by the way, is at the core of current taxation conflicts between Switzerland and the outside world, most notably the United States and the European Union. This quirk in Swiss tax law, in conjunction with bank secrecy laws, provides legal cover for tax evaders who hold accounts in Switzerland but whose tax home is elsewhere.

A second factor is the Swiss policy of absolute neutrality which the country implemented after WW II and was only softened when Switzerland joined the UN in 2002. In this strict interpretation of the 1907 Hague Convention on the “Rights and Duties of Neutral Powers,” Switzerland abstained from international actions against other countries, even trade embargoes. Therefore, Switzerland continued to trade with the Apartheid regime in South Africa , including the sale of war materials. Swiss corporations thus were free to engage in trade with countries like South Africa or Iran. Switzerland offered a safe home base to Marc Rich who had free hand to trade commodities with renegade countries like South Africa and thus to circumvent UN trade sanctions and embargoes and profit from them.

The third factor is that Marc Rich was good for business in Zug. Marc Rich and his corporation brought wealth into the community, and he enjoyed the protection of local politicians in return, particularly during the 1980s when he was a fugitive. Ties to then Zug mayor Walther A. Hegglin and to Georg Stucky, the cantonal minister of finance from 1975 to 1990, appear to have been particularly close. Hegglin allegedly coined the saying, “Was gut ist für Marc Rich, ist auch gut für Zug.” (What is good for Marc Rich is good for Zug as well.) In an interview with the Neue Luzerner Zeitung this week, Hegglin stated, “We owed a lot to Marc Rich,” explaining that tax revenue from Rich’s company created a windfall for the city. Stucky served on the board of the Marc Rich Group and of some of his charitable foundations from the early 1990s onward and has remained a close business associate until now–even though he simultaneously was a member of the National Council (lower chamber of the Swiss national parliament) from 1979 to 1999. In an Associated Press article by Clare Nallis from 2001 he is quoted as saying about Rich: “The whole picture of him has been completely distorted. He is an extremely generous man and he’s done an incredible amount of good.”

The fourth factor is that Marc Rich after his 1983 indictment in the US stepped up his philanthropic efforts which benefited Switzerland, other European countries, and Israel. According to his own official biography, his foundations have donated over $150’000’000 to various charitable causes. The Swiss Foundation for the Doron Prize, founded in 1986, recognizes Swiss “individuals and institutions that devote time, energy and/or financial resources to the fields of social welfare, education, arts and culture, and science.” The Marc Rich Foundation for Education, Culture and Welfare, chartered in 1991, seeks to promote education, art, culture and scientific research in Europe and Israel. And in 1989, Rich donated his extensive photography collection to the Kunsthaus Zürich, the premier art museum in Switzerland. Furthermore, he was an important sponsor of the EVZ, the local hockey club and one of the top teams in Switzerland. Through his philanthropy and a public relations campaign, “he achieved a level of social respectability in Swiss society not usually afforded to those facing 325 years in an American prison if the feds had had their way,” as the obituary in The Economist cheekily points out.

The story of Marc Rich shows how easily a wealthy renegade can sway the public opinion and achieve respectability by cleverly catering to small state sensibilities. But even in Zug, Marc Rich was not without detractors. Josef “Jo” Lang of the Green-Alternative movement created a political career out of his opposition to Marc Rich and his business practices, as he told the Zurich daily Tages-Anzeiger this week, and his party tends to garner around 20 per cent of the popular vote. In a small state, colorful and controversial figures like Marc Rich quickly can rise to a level of notoriety not seen in large states, but this also true for their equally colorful detractors.

News from Appalachia: UBS Is not the Kind of Bank the Swiss Think It Is

Few outside of Switzerland know what UBS stands for (or used to stand for): Union Bank of Switzerland. Few inside of Switzerland know that it is not really a Swiss bank.

Before English ruled the world, the bank was called Schweizerische Bankgesellschaft (SBG), or Union Bank of Switzerland (UBS) in its international business operations–its logo worked for both English and German.

When the Schweizerische Bankgesellschaft merged with the Schweizerischer Bankverein (Swiss Bank Corporation, or SBV for short) in1998, it became the second-largest bank in the world and simply called itself UBS, keeping the three interlocked keys of the SBV as its logo, but dropping the pretense that UBS stands for anything.

Two things are noteworthy: first, the acronym was based on the name of the bank in English, not German. And second, the fact that UBS does not really stand or anything anymore detaches the name from Switzerland–the origin of the “S” in the corporate name. Both indicate that UBS is downplaying its Swissness: with the merger and name change in 1998, they were positioning themselves as a global financial conglomerate that happens to be headquartered in Zurich. In positioning themselves as a global player, UBS clearly was interested in shedding any references that point to any national origin.

Most people outside of Switzerland do not see UBS as a Swiss bank–they see UBS as a global financial conglomerate, and in some places there have been protests against UBS because it was at the heart of a local conflict. One example is this demonstrations against UBS during a labor dispute involving cleaning staff in London in 2010:

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Protests against UBS in London in 2010. (Source: demotix.com, accessed 6/1/13)

In December 2012, global protest against UBS even hit home base: as the banking giant was negotiating a settlement with US and British authorities regarding its manipulation of interest rates, protesters gathered in the Paradeplatz in Zurich, where both UBS (center) and CS (right) are headquartered, and formed a giant red fish.

Protests against UBS in Zurich, December 2012 (nyt.com, accessed 6/1/13)

More recently, on May 24, 2013, activists entered the Knoxville, TN, branch of UBS wealth management services and refused to leave. (By the way, the web site of the Knoxville branch in no way communicates that UBS is a Swiss bank.) They protested against UBS because it is financing coal mining operations in Appalachia which is leading to mountaintop removals and extensive environmental destruction.

Protests against Knoxville UBS branch in May 2013 (mountainjustice.org, accessed 6/1/13)

Protesters also staged a sit-in in front of the UBS Knoxville branch, locking themselves to the effigy of an investment banker. The UBS Hands Off Appalachia campaign even has its own Facebook page. Protests against UBS also occurred in other parts of the Appalachia region, such as in Lexington, KY.

This UBS appears to have little in common with the UBS most Swiss still see as one of their national brands. Citizens of small states see major corporations that grew in their countries as national treasures. Nokia in Finland is the textbook example. No American seriously would identify with Bank of America, and if it were to go out of business (which it won’t because it is too big to fail) few would be upset about it (except for those who lost money). If UBS, on the other hand, were to go out of business (which it won’t because it is way too big to fail–and already was bailed out once in 2008) it would be regarded as the demise of a national symbol and a national humiliation. The demise of Swissair in 2001 is a textbook example: thousands demonstrated against “United Bandits of Switzerland” because UBS failed to make cash available to Swissair before its grounding–one national symbol betraying another. More on that in a different post.

Big corporations in small states fill citizens with pride. The message is that even small states and their economic institutions can be global players, and the well-being of these corporations has great symbolic (as well as economic) value for small states. Global corporations fill citizens of small countries with pride and give them a sense of importance in a globalized world that otherwise has little regard for them. The Swiss still see the two large Swiss banks UBS and CS (Credit Suisse) as national institutions even though this is not how the two banks see themselves.

UBS has been the eye of the storm in the ongoing taxation conflict between Switzerland and other countries, most notably the United States–more on that in another blog. Many Swiss resent the fact that Swiss banks are cooperating with the US government to prosecute large-scale tax evaders and thus, in their view, are selling out the Swiss bank secret–this also will merit another blog entry. UBS increasingly sees the Swiss bank secret as a PR debacle that is bad for prestige and business. For the Swiss, and particularly for conservatives, the bank secret still is a matter of national identity.

UBS profits greatly from its Swiss home base: Switzerland offers unparalleled political stability, a highly developed infrastructure, and a good quality of life, and he Swiss government pursues market-friendly policies from which the financial sector profits greatly–never in its modern history has the Swiss government restricted the flow of capital. But in the age of globalization no financial institution with a global reach wants to be defined in terms of national origin. In short, in times of globalization large corporate conglomerates do their best to de-nationalize themselves. So the story of UBS in Switzerland tells of a growing conflict between a post-national financial conglomerate and a public that still largely regards UBS as a national treasure.

When Second Place Is as Good as Winning

During the hockey World Championships in Stockholm and Helsinki in May 2013, the Swiss team won all seven group games, beat the Czech Republic and the United States in elimination games, but finally succumbed to Sweden in the final game in Stockholm on May 19. While the rest of the world barely took note, the Swiss public went absolutely nuts. The Swiss tabloid Blick even printed a free special issue—to celebrate second place.

Who won? Hint: not the Swiss team. (Blick.ch, accessed May 20, 2013)

“Weltmeister der Herzen” (world champion of the hearts) was the big headline in gold letters on the cover of the 16-page edition. It also promises a “Poster unserer Helden” (poster of our heroes) as a centerfold. Even the more reserved Neue Zürcher Zeitung, the Swiss newspaper of record, wrote enthusiastically: “Die Schweizer schrieben in Stockholm Eishockey-Geschichte, ein Märchen vom unbeirrbaren Kampfgeist, von Einsatzbereitschaft und Selbstbewusstsein.” (The Swiss wrote hockey history in Stockholm, a fairy tale of unwavering fighting spirit, dedication and self-confidence.) Even international news outlets took note of the exuberant Swiss celebration of defeat, like the German cable news channel n-tv whose headline read “Schweiz feiert Silber wie Gold!” (Switzerland celebrates silver like gold!) The advertisement on the back cover of the Blick special free edition, sponsored by major Swiss newsstand operators, says it all: “Being vice world champion is totally okay, too.”

(Blick.ch, accessed May 20, 2013)

While in large countries, like the US, only victories count, expectations in small states are considerably lower, and Switzerland is a textbook example for this. The Swiss are happy if their team can keep up with the international competition. Losing is fine as long as the loss is not humiliating. Winning against teams from large countries is not expected, and when it does happen the Swiss fans are ecstatic. A good example is the victory against Spain in group play at the 2010 soccer World Cup. While losing the other two group games was disappointing, the Swiss team could return home with their pride intact. Just qualifying for and participating in a major tournament fills fans with pride. Being there was more important than winning, and having beaten the eventual world champion was just a bonus.

A notable example is the 2006 Soccer World Cup where the Swiss were eliminated by the Ukraine in a penalty shootout in the second round. The Swiss tabloid Blick wrote: “Our heroes have to go home. Without conceding a single goal. Yes, Switzerland even wrote a piece of World Cup history. They are the first team ever to have been eliminated from a World Cup tournament without conceding a single goal!” Being eliminated from the tournament in a penalty shoot-out without losing a game and without conceding a single goal during regular play was a moment worth celebrating: in defeat, the Swiss team just had set a new FIFA World Cup record. This is a fine example for how small states can tease out small victories out of what everybody else would see as a defeat. As winning the tournament was elusive, this small moral victory was worth celebrating.

In the recent hockey World Championship tournament, there were plenty of signs of victory in defeat as well. Victories against hockey powers like Canada, Sweden (in group play), the US, and the Czech Republic (twice) were celebrated in the media in enthusiastic headlines. Furthermore, two of the six players in the all-star team were Swiss, and the Swiss defender Roman Josi was chosen as the MVP of the entire tournament–both reasons for celebration. The message is clear: even though the Swiss team lost the big game, there is ample reason for happiness. As the tabloid Blick put it in its report on the game: “Ihr seid trotzdem Silberhelden” (You are are silver heroes nonetheless).

In the Swiss sportive world, defeat is acceptable as long as it is honorable. The sportive vocabulary is spiked with phrases that embody this spirit: terms like Achtungserfolg (respectable success [in defeat]) and ehrenvolle Niederlage (honorable defeat) are often used in the media to describe losses by Swiss teams or individuals. Wolfgang Bortlik evokes this attitude in his short 2008 monograph entitled Hopp Schwiiz! (Go Switzerland!) with the telling subtitle Fußball in der Schweiz oder die Kunst der ehrenvollen Niederlage (soccer in Switzerland or the art the honorable defeat). As sportive successes are not abundant in a small state like Switzerland, developing rhetorical categories to make failure look like success has become a national pastime.

(Blick.ch, accessed May 20, 2013)

This is how the Blick special edition could frame the performance of the Swiss national team as “Ein Märchen in 10 Akten” (a fairy tale in 10 acts), again using the fairy tale metaphor while completely glossing over the fact that the tenth act did not have a happy ending. Likewise, the ad by PostFinance on the opposite page congratulates the team and states that “all of Switzerland is happy about the World Championship success.” Even for the postal bank, second place is as good as winning.

Just playing in the final game in Stockholm thus ranks as one of the biggest successes in the history of Swiss team sports–the tabloid Blick ranked it second only to the victories of Alinghi in the America’s Cup in 2003 and 2007. The Alinghi victory in 2003 created an amazing surge of interest in sailing in land-locked Switzerland. If a Swiss individual or a Swiss team does well internationally–totally against all expectations, of course–interest in that sport rises dramatically. Before Martina Hingis and Roger Federer mesmerized the Swiss public with their Grand Slam victories, tennis was seen as an elitist, marginal sport with modest media attention. Now, the entire country watches when Federer plays in any tournament.

Before the final game in Stockholm, one question was discussed in the Swiss media over and over again: are we going to win? Can we win the big game? This question was also put to the players in the Swiss team. While they all answered in the affirmative, there always was a hint of doubt: if felt like the players did not really believe in the possibility of victory in spite of statements to the contrary. If you are from a small country, you know that you are not supposed to win big games. It felt like it was not the place for the Swiss to be on top of the hockey world. Being world champion in a major team sport is just unimaginable in Switzerland–it would have felt like a violation of the established order. The Swiss team had done enough to ensure a place in history and to make the Swiss proud. As winning could not really be imagined, it was okay to drop the big game. And they did.

A commentary in the Neue Luzerner Zeitung picks up this point and argues that the Swiss will never be world champions with this attitude. In their view, the Swiss now have two options. The first one is to indulge in total happiness over the best national team ever which celebrated the biggest success in Swiss hockey history.The commentary concludes, “If we do that, we will never be world champion.” The second option is to be proud of the Swiss performance, but not satisfied. When the new season begins in September, so the argument, the disappointment has to outweigh self-satisfaction–this is the only way to ever become world champion.

The Swedes did not have better players, they were not a technically better, and they were not better coached, according to this commentary in the Lucerne paper. The difference was one of attitude: the Swedes showed self-confidence to the point of arrogance: just as for the Swiss team winning was not in the realm of the imaginable, losing was not in the realm of the imaginable for the Swedes: losing in front of their own fans was not an option. They showed assertive body language, resolve in their actions, and a grim determination that signaled to the Swiss that they had no intention of losing this game.

This is a new kind kind of commentary and a new kind of language to talk about sports in Switzerland. We will see in the Olympic tournament in 2014 if and how fast the Swiss small-state-attitude towards winning can be adjusted.

One point of consolation: the Swiss success in Stockholm no doubt will have coattails. One result will be that a larger number of Swiss players will get the opportunity to play in the NHL–the undisputed top hockey league in the world. The Swiss media regularly report on the successes (and failures) of Swiss soccer, hockey, and basketball players who play in top leagues abroad. More Swiss players in the NHL means that there will be more feel-good-moments for the Swiss. So the Swiss will have more opportunity to be proud without making a real commitment to winning.

Cultures Contexts

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