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The rivalry between the USA and China dominates geopolitics. At the same time, NATO is pursuing a clear course to support Ukraine and Europe against the common enemy, Russia; the same is true for the re-elected EU President Ursula von der Leyen and designated EU foreign policy chief Kaja Kallas.

All forces that directly or indirectly support Russia in its war against Ukraine and Europe must face severe consequences. With the possible election of Donald Trump, a new level of escalation is probable; first, with sanctions and tariffs against China, and secondly, with massive pressure on European NATO partners to contribute significantly more financially and militarily.

«Switzerland currently has no army that can defend and fight»

Against this backdrop, the denial of reality in Swiss politics takes on surreal dimensions, as it continues to live by the motto «What must not be, cannot be,» or in other words: «Since we do not want to provide the urgently needed financial resources for the army, we also do not see any relevant threat.» This includes labeling even prudent voices like that of Army Chief Thomas Süssli as scaremongers.

Switzerland currently has no army that can defend and fight, and at the same time, the European security situation is more threatening than ever since World War II. Moreover, a large – notably conservative – majority of the government and parliament refuses to provide the necessary financial resources for the army.

«Previous financing proposals lack a national strategy»

A ready-to-deploy army is the core of national defense. Therefore, financing the army's rearmament has absolute priority.

However, the dire state of the army requires that it receives large financial resources immediately – that is, at least 10 billion francs this year and from 2024 at least 2 percent of GDP annually. This is not a financial problem but purely a matter of political will.

Previous financing proposals from parties and politicians lack a national strategy. They reflect a patchwork of arbitrary measures to serve vested interests.
Under these premises, the army's financial needs should be secured in the short term through federal defense bonds, so-called Swiss Federal Defense Bonds, and in the long term through higher economic and productivity growth as well as institutionalized cooperation with the EU and NATO.

Issuing Swiss Federal Defense Bonds is the most efficient way for the army to procure the needed funds. Therefore, the next step would be to develop a solid decision-making basis through the Federal Department of Finance (FDF), the Swiss National Bank (SNB), and relevant Swiss banks.

«Swiss Federal Defense Bonds would also be attractive for the Swiss financial industry»

The opportunity is great to procure private and institutional financial resources on the international capital market under favorable conditions. The public budget would be minimally burdened, as the Confederation is a AAA debtor, and depending on the terms and conditions, a Swiss Federal Defense Bond in francs would be a sought-after, safe, liquid, and attractive financial investment.

The key parameters for an initial Swiss Federal Defense Bond in the fall of 2024 through a banking syndicate would be a volume of 10 billion francs; AAA rating through a Swiss government guarantee; perpetual maturity (Perpetual); different tranches for domestic and foreign investors, retail investors, and institutions; interest rate setting through an auction process.

The launch of Swiss Federal Defense Bonds would also be attractive for the Swiss financial industry, which could take a leading role in Europe regarding the emergence of a rapidly growing capital market for government and corporate debtors in the defense sector.

«Only growth offers security and prosperity»

Switzerland is far below its economic growth potential. Therefore, the described initiative is a great opportunity. This potential must be unleashed through reforms, as only growth offers security and prosperity.

Most importantly, leadership is required. This means governing and not hoping, sitting out, and reacting. Finance Minister Karin Keller-Sutter, Economic Minister Guy Parmelin, and the conservative majority in the Federal Council are responsible for ensuring a sovereign, secure, economically performing, and globally open Switzerland.

Beat Wittmann has been chairman and partner of Zurich-based financial advisory firm Porta Advisors for eight years now. His more than 30-year career in Swiss banking includes stints at both UBS and Credit Suisse as well as Clariden Leu and Julius Baer. He operated his own firm from 2009 to 2015, first independently and more recently under the Raiffeisen Group.

Previous contributions: Rudi Bogni, Peter Kurer, Rolf Banz, Dieter Ruloff, Werner Vogt, Walter Wittmann, Alfred Mettler, Robert Holzach, Craig Murray, David Zollinger, Arthur Bolliger, Beat Kappeler, Chris Rowe, Stefan Gerlach, Marc Lussy, Nuno Fernandes, Richard Egger, Maurice Pedergnana, Marco Bargel, Steve Hanke, Urs Schoettli, Ursula Finsterwald, Stefan Kreuzkamp, Oliver Bussmann, Michael Benz, Albert Steck, Martin Dahinden, Thomas Fedier, Alfred Mettler, Brigitte Strebel, Mirjam Staub-Bisang, Nicolas Roth, Thorsten Polleit, Kim Iskyan, Stephen Dover, Denise Kenyon-Rouvinez, Christian Dreyer, Kinan Khadam-Al-Jame, Robert Hemmi, Anton Affentranger, Yves Mirabaud, Katharina Bart, Frédéric Papp, Hans-Martin Kraus, Gerard Guerdat, Mario Bassi, Stephen Thariyan, Dan Steinbock, Rino Borini, Bert Flossbach, Michael Hasenstab, Guido Schilling, Werner E. Rutsch, Dorte Bech Vizard, Katharina Bart, Maya Bhandari, Jean Tirole, Hans Jakob Roth, Marco Martinelli, Thomas Sutter, Tom King, Werner Peyer, Thomas Kupfer, Peter Kurer, Arturo Bris, Frederic Papp, James Syme, Dennis Larsen, Bernd Kramer, Armin Jans, Nicolas Roth, Hans Ulrich Jost, Patrick Hunger, Fabrizio Quirighetti, Claire Shaw, Peter Fanconi, Alex Wolf, Dan Steinbock, Patrick Scheurle, Sandro Occhilupo, Will Ballard, Nicholas Yeo, Claude-Alain Margelisch, Jean-François Hirschel, Jens Pongratz, Samuel Gerber, Philipp Weckherlin, Anne Richards, Antoni Trenchev, Benoit Barbereau, Pascal R. Bersier, Shaul Lifshitz, Klaus Breiner, Ana Botín, Martin Gilbert, Jesper Koll, Ingo Rauser, Carlo Capaul, Markus Winkler, Thomas Steinemann, Christina Boeck, Guillaume Compeyron, Miro Zivkovic, Alexander F. Wagner, Eric Heymann, Christoph Sax, Felix Brem, Jochen Moebert, Jacques-Aurélien Marcireau, Ursula Finsterwald, Michel Longhini, Stefan Blum, Zsolt Kohalmi, Nicolas Ramelet, Søren Bjønness, Gilles Prince, Salman Ahmed, Peter van der Welle, Ken Orchard, Christian Gast, Jeffrey Bohn, Juergen Braunstein, Jeff Voegeli, Fiona Frick, Stefan Schneider, Matthias Hunn, Andreas Vetsch, Fabiana Fedeli,  Kim Fournais, Carole Millet, Swetha Ramachandran, Thomas Stucki, Neil Shearing, Tom Naratil, Oliver Berger, Robert Sharps, Tobias Mueller, Florian Wicki, Jean Keller, Niels Lan Doky, Johnny El Hachem, Judith Basad, Katharina Bart, Thorsten Polleit, Peter Schmid, Karam Hinduja, Zsolt Kohalmi, Raphaël Surber, Santosh Brivio, Mark Urquhart, Olivier Kessler, Bruno Capone, Peter Hody, Michael Bornhaeusser, Agnieszka Walorska, Thomas Mueller, Ebrahim Attarzadeh, Marcel Hostettler, Hui Zhang, Michael Bornhaeusser, Reto Jauch, Angela Agostini, Guy de Blonay, Tatjana Greil Castro, Jean-Baptiste Berthon, Marc Saint John Webb, Dietrich Goenemeyer, Mobeen Tahir, Didier Saint-Georges, Serge Tabachnik, Vega Ibanez, David Folkerts-Landau, Andreas Ita, Michael Welti, Fabrizio Pagani, Roman Balzan, Todd Saligman, Stuart Dunbar, Carina Schaurte, Birte Orth-Freese, Gun Woo, Lamara von Albertini, Ramon Vogt, Andrea Hoffmann, Niccolò Garzelli, Darren Williams, Benjamin Böhner, Mike Judith, Jared Cook, Henk Grootveld, Roman Gaus, Nicolas Faller, Anna Stünzi, Thomas Höhne-Sparborth, Fabrizio Pagani, Guy de Blonay, Jan Boudewijns, Sean Hagerty, Alina Donets, Sébastien Galy, Roman von Ah, Fernando Fernández, Georg von Wyss, Stefan Bannwart, Andreas Britt, Frédéric Leroux, Nick Platjouw, Rolando Grandi, Philipp Kaupke, Gérard Piasko, Brad Slingerlend, Dieter Wermuth, Grégoire Bordier, Thomas Signer, Gianluca Gerosa, Christine Houston, Manuel Romera Robles, Fabian Käslin, Claudia Kraaz, Marco Huwiler, Lukas Zihlmann, Sherif Mamdouh, Harald Preissler, Taimur Hyat, Philipp Cottier, Andreas Herrmann, Camille Vial, Marcus Hüttinger, Serge Beck, Alannah Beer, Stéphane Monier, Ashley Simmons, Lars Jaeger, Shanna Strauss-Frank, Bertrand Binggeli, Marionna Wegenstein, George Muzinich, Jian Shi Cortesi, Razan Nasser, Nicolas Forest, Joerg Ruetschi, Reto Jauch, Bernardo Brunschwiler, Charles-Henry Monchau, Philip Adler, Ha Duong, Teodoro Cocca, Beat Wittmann, Jan Brzezek, Nicolas Mousset, Beat Weiss, Pascal Mischler, Andrew Isbester, Konrad Hummler, Jan Beckers, Martin Velten, Katharine Neiss, Claude Baumann, Daniel Roarty, Kubilay Yalcin, Robert Almeida, Karin M. Klossek, Marc Taverner, Charlie T. Munger, Daniel Kobler, Patrick Stauber, Colin Vidal, Anna Rosenber, Judith Wallenstein, Adriano Lucatelli, Daniel Goleman, Val Olson, Brice Prunas, Francesco Magistra, Frances Weir, Luis Maldonado, Francesco Magistra, Nadège Lesueur-Pène, Massimo Pedrazzini, Eric Sarasin, David Ellis, Dina Ting, Christopher Gannatti, Shaniel Ramjee, Mihkel Vitsur, Nannette Hechler-Fayd’herbe, Ralph Ebert, Chris Cottorone, Francesco Mandalà, Mariolina Esposito, Maryann Umoren Selfe, Dominique Gerster, Marc Arand, Christian Kälin, Nadège Dufossé, Benjamin Melman, Brigitte Kaps, Florin Baeriswyl, Marc Reinhardt, and Thomas Holderegger.