Gold casts shadow on Swiss war neutrality

It is the biggest foreign policy crisis in Switzerland since the Second World War. To the outside world, the questions about the fate of Nazi gold have raised fresh suspicions about the morality of Switzerland's secretive banking system.

For the Swiss, the affair has prompted a complete re-assessment of their war time history and shattered confidence in their neutrality.

Allegations that their post-war success was based on millions stashed away during the conflict, even that the Second World War would have ended sooner had it not been for Switzerland's willingness to trade with the Nazis, have ruffled the confident, logical Swiss and dented belief in what they regard as their good record.

Where they once prided themselves on having accepted a quarter of a million refugees fleeing persecution in the rest of Europe, they now are having explain why they rejected at least 38,000, many of them Jews sent back to the the Nazis and certain death.

Flavio Cotti, the Foreign Minister, said this week: "I'm sure ninety- nine per cent of our population which has not learned history has grown up with the conviction that the general attitude of Switzerland during the Second World War was an absolutely correct attitude." Now, he said, they were being asked to come to terms with the "negative aspects".

The initiative has come from the top. The government has appointed a commission under Professor Jean-Francois Bergier. It will seek, Mr Cotti said, "to re-establish the reality of that time". Professor Bergier sees the inquiry as "an opportunity to acknowledge our past so we can confront the present and the future".

The process is not only academic. Switzerland has shunned formal ties with the rest of the world, rejecting membership of the EEA in 1992 and joining United Nations organisations, but not the body itself. Now it is being forced to reconsider the policy of isolation.

Jacques Picard, a member of the Bergier commission, said the country had "lost its image" and was redefining a new one. "We have to understand that we are part of the international community," he said.

With unemployment, which was previously unknown, now at almost 6 per cent, and one of the slowest growth rates in the OECD, the economic situation is also challenging the isolationism of the past.

But the process is proving difficult. Thomas Borer, chief of the government task force on the assets of victims of Nazism in Switzerland, outlined the clash of cultures between Switzerland and its critics.

The Americans, in particular, accuse the Swiss of dragging their feet while the last Holocaust survivors are dying. Yet speed is not the Swiss way. "We are basically watchmakers," says Mr Borer. "What we make is a very delicate watch which is going to show us very precise time. To build a watch like that takes several years."

With four different political parties in the seven-member cabinet, the constitution itself has come under fire for delaying a resolution.

"The whole system is very shaky and not good at solving anything that isn't an ordinary problem. It's like Swiss history - it is a success story as long as it is business as usual," one Swiss diplomat said.

The big banks, for instance, have just given 100m Swiss francs to a humanitarian fund for victims of the Holocaust. In a poll, only half the population believes the government should also contribute to it. So, rather than risk a referendum, politicians are awaiting initial reports from the Bergier Commission to give them reasons to do so.

Many older people find it hard to accept that their war efforts are no longer lauded. Although documents show the Germans assured Switzerland it could escape invasion, the fear of a German attack was very real to those who spent war years in foxholes on the border.

The younger generation has been more willing to listen, though Lili Nabholz, the politician who steered the lifting of Swiss banking secrecy laws to aid the current investigations, fears some are irritated by foreign criticism. There has been a rise in open anti-semitism.

Swiss Jews recognise that the investigations have met with a certain "psychological resistance" from their countrymen. Rolf Bloch, president of the Swiss Federation of Jewish Communities, says they are satisfied there is movement towards solving the moral and financial questions of the war.

Mr Bloch is not given to the loud protests of the American Jewish lobby. Yet, he quietly tells stories which his fellow citizens have not wanted to hear.

In 1942, when he was 12, a young Jewish brother and sister who had escaped from Belgium were found hiding in Berne and were taken in. Naively, the Swiss family told the authorities. Suddenly, the police arrived. The teenagers were thrown out of Switzerland and died in Auschwitz.

"The Swiss population was against the Nazis. It does not mean they were in favour of the Jews," Mr Bloch said. "That is something we cannot forget."