By Emma Thomasson
Swiss politics, usually reassuringly boring for the investors who stash their savings with the country's secretive banks, have become unusually heated, just as stability becomes an ever more prized asset.
The Swiss government has come under mounting criticism for failing to defend strict bank secrecy from a global assault and for apologising to Libya over the arrest of the son of Muammar Gaddafi without winning the return of two detained businessmen.
The cabinet said last month it would put forward proposals by early next year to reform a system largely unchanged since the founding of the modern federal Swiss state in 1848. It also plans a special session this autumn to discuss foreign policy.
The model of government under which the seven cabinet seats are divided between the biggest parties and the presidency is rotated each year has preserved harmony among Switzerland's fiercely independent regions and language groups for decades.
But the system can lead to indecisiveness, and the lack of a permanent president has been blamed for undermining neutral Switzerland's profile on the international stage.
Dieter Freiburghaus, retired politics professor, says Switzerland has "the weakest government of all modern states", as globalisation increases the demands on foreign policy.
Ideas for change include extending the term of the presidency from the current one year and linking the office more closely with the leadership of the foreign ministry.
However, any reforms are likely to be fiercely contested.
"This is going to run for some time. They have been talking about reforming the Federal Council (cabinet) for 15 years," said Clive Church, a Swiss politics expert from Kent University.
NO MORE SPECIAL CASE?
Switzerland has suffered an identity crisis since the end of the Cold War robbed its neutrality of much meaning. Debacles ranging from the discovery of Nazi gold in its bank accounts to the collapse of Swissair led many to suspect it had been too confident in the success of the "Sonderfall Schweiz" or "Swiss special case".
The soul-searching helped fuelled the rise of the right-wing Swiss People's Party (SVP), which won the largest share of the vote in the last general election in 2007, and has shaken the cosy political system with its nationalist rhetoric.
Under the "magic formula", the Federal Council traditionally has representatives from the four largest parties but that has become increasingly unworkable as voting has fragmented.
The issue has come to a head in recent months after the resignation of Interior Minister Pascal Couchepin, prompting a row over which party should get to replace him in cabinet. Parliament votes on a successor on Sept. 16.
Finance Minister Hans-Rudolf Merz, currently serving as president for a year and like Couchepin a member of the liberal Free Democrats, has also come under pressure to step down.
Merz has been pilloried for a surprise mission to Tripoli to try to patch up diplomatic ties without consulting his cabinet colleagues and for weakening the bank secrecy that helped make Switzerland the world's biggest "offshore" financial centre.
Its tax haven appeal gone, bankers say they will now have to rely more on the country's safe haven status to attract funds.
While the current crisis has prompted calls for more radical changes, few see Switzerland replacing the power-sharing "concordance" system with a more competitive form of politics.
"Concordance is pretty deeply anchored," said Andreas Ladner from the Swiss Graduate School of Public Administration, adding that two more cabinet members could revive the "magic formula".
A recent poll showed 80 percent of Swiss think readiness to cooperate with other parties in cabinet is the most important criterion for membership, rather than party allegiance.
It showed 63 percent backed extending the president's term to two years but 53 percent rejected a direct cabinet election.
Kaspar Villiger, a former finance minister brought in as UBS chairman this year after the government bailed out the bank, said strengthening the presidency could undermine cabinet collegiality, and praised the current system.
"We are not a society of consensus, we are a society of conflict. We have a consensus about how to deal with conflict," he told Reuters. "A country which has this wealth, this stability cannot be doing anything wrong."
