The Swiss Economy Introduced
Switzerland is a fairly small country but it is home to a number of very large corporations. The reason for this is that Switzerland is one of the most capitalist countries in the world. There is very little government interference and the country is consistently ranked as one of the easiest in which to do business. Switzerland also has some of the lowest taxes in Europe. This has helped to attract a lot of businesses to the country and has given it a strong diversified economy, although they were hit hard by the recent global financial crisis.
Switzerland are famous for their long history of neutrality. This means they generally tend to do things on their own. However in recent years they have entered into agreements with the European Union to help increase trade. It is unlikely that Switzerland will ever become a member of the European Union but they are willing to enter into trade agreements with them. These agreements allow mostly for free trade however there is still some protectionist trade policy on the part of the Swiss. There are certain sectors of their economy that they still aren't ready to open up to competition.
The Swiss are of course famous for their banks. Several of the world's largest banks are based in Switzerland. Their strategic location, neutrality and banking secrecy laws have made them the preferred location for many financial transactions. The result is that the core of the Swiss economy is the financial services sector. Unfortunately this meant that they were hit especially hard during the global financial crisis. They have also been forced to change some of their banking secrecy laws as it had become obvious that criminals from other countries were taking advantage of this secrecy. The Swiss government came under heavy international pressure to change the laws.
Switzerland also has a very robust manufacturing center, focusing mainly on high tech products. The aerospace industry is one of the largest in county as are a number of other high tech industries. The Swiss excel at these types of industries because of their well educated and highly skilled work force. They are well known for producing high quality products and this has helped them to maintain their competitive advantage in these fields.
Switzerland has a very low unemployment rate and has had to make a real effort to attract foreign workers to help offset the low birth rate. The country also has some of the world's highest wages and some of the lowest taxes in Europe. The result is that the Swiss have one of the highest levels of purchasing power in the world. Despite this there are some issues that the country is facing. The biggest is that economic growth has been slow due to recent problems in the banking sector. The government has done everything they can to stimulate the economy with low taxes and interest rates that are about zero. Nevertheless the economy is still struggling.