As Switzerland’s cherished bank secrecy comes increasingly under pressure, the Swiss government has to decide whether now is the time to bring in PR professionals.
swissinfo.ch spoke to communications expert Iwan Rickenbacher, an honorary professor at Bern University, about the damage to Switzerland’s image, and what Presence Switzerland – the government’s PR agency – should be doing about it.
On February 5 the American magazine Newsweek declared “The End of Switzerland” over the issue of undeclared foreign assets in Swiss banks. The article argued that the economic crisis and growing xenophobia would destroy the greatest myths about Switzerland and undermine its status as a model country.
The same harsh tone was taken up by media in other European countries and the United States.
swissinfo.ch: Is Switzerland like an injured animal that the hunters are determined to run to the ground?
Iwan Rickenbacher: That would be one interpretation. Another would be to see Switzerland as an exceptional country, which even in the worst year of recession, 2009, managed to produce a budget surplus.
Switzerland is less affected by unemployment than other countries and its finance centre is functioning well again, in places very well. So what we are witnessing could just be envy.
swissinfo.ch: Where is Switzerland’s image most affected? Holiday makers came back to ski this season and foreign trade is slowly improving.
I.R.: The massive attacks in some media on Switzerland, its authorities and its financial industry will have a very ambiguous impact. Because every criticism comes with a mention of Switzerland’s trump cards, its stable political situation and low taxes.
The message will be received differently in different countries. Politicians might be encouraged to speak with a harsher tone to show the public that they want to crack down on tax dodgers and tax fugitives.
But for a broad public Switzerland is being confirmed as a country which stands for all the things they would like to have too.
swissinfo.ch: What could the government’s PR agency, Presence Switzerland, hope to achieve through a campaign? Is it not an illusion to try to give Switzerland a clean image after decades of attracting untaxed money?
I.R.: We have to distinguish between two things. There is the reaction to the crisis as such. Organisations such as Presence Switzerland are unlikely to have many options to intervene. It is for politicians and the authorities to step in and find solutions in direct talks with foreign authorities.
There is also a positive flipside to such crises, in that they reveal old and hidden prejudices towards the country. They allow organisations, such as PRS, to analyse the distorted perceptions and false understandings, as happened during the crisis over dormant Holocaust-era assets.
As a next step campaigns can be launched in key countries and among key players. PRS cannot act as a firefighter. A good image can only be developed through a long-term effort.
swissinfo.ch: Does the Swiss government have any alternative than to propose a clean money strategy similar to Liechtenstein’s?
I.R.: At the moment there is probably no other option. But it is still a bit early to take stock.
In the current situation it is up to the banks and the authorities to see to it that there will be new framework conditions to start from.
swissinfo.ch: Are the Swiss banks and the government acting in the same way as they did during the crisis over dormant accounts?
I.R.: Your question implies that it is possible to look for and find easier solutions if we act straight away instead of waiting and having to comply with greater demands.
Let’s not underestimate the fact that Switzerland is a small country. When the fundamental interests of big powers are affected, such as the United States or members of the European Union, Switzerland will sooner or later have to deal with these demands.
In other words, Switzerland will have to find solutions acceptable to our big neighbours and partners. In such cases there is a rather limited room for manoeuvre.
swissinfo.ch: PRS launched an image campaign in the US at the end of last year, but it has been stopped in the meantime apparently because of a lack of funding. Do such operations make sense under these circumstances?
I.R.: There are those who say that Switzerland still has an excellent reputation among opinion leaders in the US business community and in society. I’m not sure we can simply bank on this.
On the contrary it is necessary to bolster this good image continuously, to build up contacts and to make the US one of the focus countries of PRS.
Of course it is unfortunate if long-term campaigns have to be halted at short notice for whatever reason.
I believe the US should not be the only focus. Emerging countries, including China and India, also need special attention.
swissinfo.ch: What should such campaigns be like?
I.R.: It is impossible to pull such a strategy out of a hat. In an interlinked world, where all information can be obtained over the internet, the personal contact has regained importance. Face-to-face contact and solid relationships are a counterbalance to the virtual world.
Networking between key players in Switzerland and other countries is one of the most important tasks. A first contact can be established at events of mutual interest, and consolidated later.
Renat Künzi, swissinfo.ch (Adapted from German by Urs Geiser)
On September 3, 2008, the government gave Presence Switzerland the task of dealing with threats to the country’s image abroad.
Part of the foreign ministry, the group tries to foster positive messages through projects abroad, by inviting foreign decision-makers and opinion-leaders to Switzerland, developing and distributing information about Switzerland abroad and by managing Switzerland’s presence at major international events.
The basis for all of Presence Switzerland’s communication is “Brand Switzerland”, through which the main messages and the visual profile of Switzerland abroad are determined.
Source: Swiss foreign ministry
May 2008: US opens case against UBS on grounds that UBS workers helped Americans hide assets from tax authorities.
February 2009: Swiss authorities give UBS permission to supply the US with data on 225 clients whom the bank helped, thereby cracking open traditional banking secrecy.
March 2009: The government adopts OECD standards on tax policy and says in the future it wants to grant administrative assistance in cases of foreign tax evasion.
April 2009: The G20 puts Switzerland on a grey list of tax havens. To be removed from the list, Switzerland must initial at least 12 new double-taxation accords.
August 2009: In a treaty with the US, Switzerland guarantees American tax authorities administrative help in a case against 4,450 US tax offenders.
September 2009: Switzerland is deleted from the OECD grey list after initialling 12th double taxation accord. But the agreements must still go before parliament and perhaps a national vote.
Italy increases pressure on Switzerland with an amnesty for Italian tax dodgers.
France and German states rely on stolen Swiss bank data to build cases against tax cheats. Over the next few months, North Rhine-Westphalia will pay €2.5 million for the information, Bavaria will consider a similar purchase, while Baden-Württemberg will decline an offer for the same. Schleswig-Holstein gets a CD of stolen tax data for free.
January 2010: The Federal Administrative Court says releasing account information on American UBS clients in the US is illegal.
February 2010: The OECD further increases pressure on Switzerland by saying it will soon regard tax evasion as a precursor to money laundering and will be prosecuted.