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We are witnessing the end of sovereign Switzerland

Switzerland has existed in its current form for 175 years.

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We are witnessing the end of sovereign Switzerland

Switzerland has existed in its current form for 175 years. Our image of the country is characterized by two things: Firstly, by great prosperity - the average per capita wealth of the Swiss was around 650,000 euros. For comparison: The Germans, who are not poor either, rank far behind with an average of around 242,000 euros.

Second of unbelievable autonomy. Its wealth and neutrality have enabled Switzerland to observe every geopolitical conflict of the past decades from a safe distance. You didn't need anyone's help. And that's why you didn't have to come to anyone's help. It was easy to live.

That changed this weekend. You can't see or feel that yet. It's still not just a steep thesis, because you can read it off the numbers with a thumbs-up.

The total assets of the four largest banks in the US is a little over a third of the gross domestic product (GDP) of the US. In Germany, on the other hand, the total assets of the three largest financial institutions - Deutsche Bank, DZ Bank and Commerzbank - is a good 2.5 trillion euros, the German GDP is at least around 3.9 trillion euros. For comparison: Switzerland's economic output last year was rounded up to 750 billion dollars. The balance sheet total of the new bank, on the other hand, is twice as large at around 1.5 trillion euros. Wrong world.

Ironically, the Swiss banks, which have contributed so much to national wealth over many years, are ending a chapter of national sovereignty with the forced emergency merger of UBS and Credit Suisse that has only existed in very few countries in the world with this level of stability. If the new big bank were to falter one day – and who would want to guarantee the opposite? – there is no holding back in Switzerland. From now on, everyone who invests in Switzerland in any way should know that.

When Deutsche Bank and UBS allegedly sounded out the forms of possible cooperation years ago, there were also reportedly reservations from Swiss politicians. Those responsible rightly feared that they would no longer be able to save an institute of this size with the money from their own state. The bank is too big, the country too small. Switzerland has now reached this fatal point even without a mega-merger that crossed national borders. It can go that fast.

Should UBS ever get into trouble, the Swiss will in future be dependent on outside help – be it from other banks or other states. But dependency is the opposite of sovereignty. And anyone who enlists the help of others in an emergency will probably also one day have to face the question of how much neutrality one can afford when those who helped one need support. For example in questions of war and peace. In politics, this is called a caesura, or a turning point in time.

"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 5 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.

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