Swiss arms industry and EU funds

A French Leclerc tank on the Swiss A13 motorway during a joint exercise on May 8, 2025 in Reichenau. Gian Ehrenzeller / Keystone

The Swiss government is seeking a security partnership with the European Union. But is this interest mutual?

Despite its neutrality, there has never been any doubt about Switzerland’s alignment with the West. Since Russia’s full-scale invasion of Ukraine, it has drawn ever closer to its Western partners, including militarily – for instance, by joining the European Sky Shield Initiative and strengtheningExternal link cooperation with NATO.

Last year, the Swiss government announcedExternal link its intention to hold talks with the European Union (EU) on a security agreement. In summer 2026, the Swiss parliament gave the government a mandate to conduct exploratory talks. If these go well, parliament will then decide on a specific negotiating mandate.

What the Swiss government has in mind is a security and defence partnership. This is above all a political agreement and declaration of intent, explains Gesine Weber, an expert on security and defence at the Centre for Security Studies (CSS) at the federal technology institute ETH Zurich. “Under such partnerships, the parties agree to deepen their dialogue and cooperate more closely at a strategic level. The agreements typically also specify the various policy areas in which they wish to cooperate.”

As Weber notes in a CSS AnalysisExternal link, the EU has significantly stepped up its cooperation with non-member states in the realm of security and defence since 2022, following Russia’s full-scale invasion of Ukraine. And, as the analysis shows, it is doing so relatively quickly and flexibly. Since late 2024, the EU has signed 12 such partnerships with countries as diverse as the United Kingdom, India and Ghana.

The EU has concluded defence agreements with non-EU European states such as Norway and the UK, but also with partners further afield, such as Canada and India. These are countries that the EU already cooperates with on security matters. “With such agreements, the EU aims to provide a more robust political framework for existing cooperation. A further aim is often to strengthen cooperation in the defence industry,” says Weber.

This is no minor matter. The member states are set to invest €800 billionExternal link (CHF750 billion) in EU defence by 2030.

And Switzerland wants to be in on this, too.

A chance for the Swiss defence industry

As a neutral, armed country, Switzerland has always set great store by having its own defence industry. This has also been partly financed by sales to European partners. Since the start of the Russian invasion of Ukraine in February 2022, however, Switzerland has been in a bind, as it bans the resale of Swiss-made weaponry to countries at war. This has not only triggered a crisis of confidence among its partner states in the EU, but also led to tangible export losses, as Swiss arms have been shunned ever since.

This situation has also prompted movement in Swiss politics. The country has revised its regulations governing war materiel exports, and the potential security agreement with the EU should be viewed in the same context. As Swiss Defence Minister Martin Pfister, declared in parliament this summer, such an agreement could help Switzerland participate more effectively in European defence procurement, “If we can carry out procurement in Europe together with other countries, it will make it cheaper due to economies of scale. This will also open up opportunities for our own industry, which will be able to play a role.” Pfister stated during the parliamentary debateExternal link on the issue.

Overlapping interests

But how receptive is the EU to an agreement of this kind with Switzerland? Last spring, EU spokeswoman Anita Hipper External linkannouncedExternal link that Switzerland was a potential candidate for a partnership. The European Commission is interested in partnerships that “serve the EU’s political and strategic interests and support the universal values upheld by the EU”, she said.

On the Swiss side, the focus so far has mainly been on the business aspect. This seems to sit well with the “Given Switzerland’s huge research strength, cooperation on defence industry policy would be of particular interest from the EU’s perspective. I think this is the area that Brussels is potentially looking at,” says Weber.

Switzerland is especially well-positioned in the drone sector. The defence ministry recently announcedExternal link that it would be placing a strategic focus on drones, drone defence and robotics. Universities and industry are also to play their part here.

In late September, the Swiss will vote on neutrality initiative, , which aims to insert an article into the constitution requiring a stricter practice of neutrality. Formally, this has nothing to do with defence deals. However, the text seeks to abolish sanctions, which are central for the EU above all in their dealings with Russia. The Swiss government opposes the popular initiative, which, if accepted, would likely raise the same questions in Brussels as a rejection of the Bilateral Agreements III.

Likewise, on paper, the Bilateral Agreements III – the updated set of treaties between Switzerland and the EU – have nothing to do with a potential defence agreement. But what if the Swiss electorate rejects the bilateral package? “I can hardly imagine a scenario in which, should significant tensions arise over the Bilateral Agreements, Brussels would suddenly be interested in cooperating more closely with Switzerland in other fields,” says Weber. 

The referendum on the Bilateral Agreements III is expected to take place in 2027. It is likely to be even longer before any defence agreement with the EU is reached.

Edited by Benjamin von Wyl. Adapted from German by Julia Bassam/ds