Representing a truly European state

Swiss Ambassador Christian Mühlethaler arrived to Hungary for the first time in 1969 as a tourist and came back several times as a tour guide in the 1970s.

Christian Mühlethaler took up his current post in Budapest as Swiss ambassador in 2008, following similar ositions in South Korea and Australia. “Bilateral relations between Switzerland and Hungary are excellent and quite intensive,” he told Diplomacy and Trade. Historical developments as well as the agile exchange between Hungarian reform theologians and Switzerland in the 16th and 17th centuries, the Swiss emigration in the times of Hungarian industrialization in the 19th century (iron manufacturer, machine and technical engineer Abraham Ganz or confectioner Emil Gerbeaud) accounted to this fact.

“The recent 150th anniversary of the reformed German church or the acceptance of Hungarian refugees in the 20th century, especially after the Hungarian revolution of 1956, witness these relations,” he added. Today, there are about 1,800 registered Swiss living in Hungary. Two thirds of them are prior Hungarian refugees or their descendants and therefore, double citizens. The past years were shaped by frequent mutual diplomatic visits (see box).

Since Hungary joined the European Union, many of the bilateral aspects have been transferred to EU levels but cooperation is still close. “Switzerland is not an EU member but is a truly European state, an island in the ocean of EU member states. The two countries often support each other in case of personnel rotations in international fora. In some countries, we issue Hungarian Schengen visa and ice versa,” the Ambassador says.

In the framework of transition programs, Switzerland engages in the reduction of social and economic disparities within the European Union through the Swiss Enlargement Contribution. Its Hungarian office was set up in 2008 to finance projects with focus on the economic and social development of the heavily disadvantaged areas in the north-east and east of Hungary.

Important partner.

For several years, trade between Hungary and Switzerland has been developing a positive direction. Hungary ranks third in Swiss priority within central European trade partners (after Poland and the Czech Republic). Worldwide, Switzerland has a surplus in bilateral trade and this is also true for relations with Hungary. Swiss exports to Hungary in 2009 amounted to CHF 999 million (EUR 781 mn), while imports were CHF 925 million (EUR 724 mn). The major sectors of exports were pharmaceuticals, followed by machines and electronics, cars and components, and metals. Hungarian exports came mostly from the machine industry, followed by cars and agricultural products.

Regarding Swiss investments in Hungary, 70% flow into the industrial sector and 30% into services. Of the latter, traditional Swiss providers like banks and insurances are lacking to a large extent in this country. In terms of foreign direct investments, Switzerland is the 10th largest in Hungary. The latest big investors are commodity trader Glenclore and essence and odorous substances producer Gilvaudan. They announced to shift production capacities to Hungary and the induced construction of new capacities. Swiss Stadler Rail is producing for Hungary 60 suburban railway trains, which have been put into operation since April 2007. The roughly 300 Swiss firms active in Hungary employ about 19,000 workers.

Importance of transparency.

While the skilled but less expensive labor force makes Hungary a very attractive destination for investment, the Ambassador says there are other considerations Swiss investors take into account. “Our companies often complain about complicated bureaucracy and the large number of permissions necessary, but the fight against corruption and the spreading of transparency are also very important. In 2009, several embassies, including the Swiss representation to Hungary, worded a statement in which we have called attention to the importance of transparency as one of the inducements of foreign direct investments in this country.”

Just like decades ago, Christian Mühlethaler still likes to discover the Hungarian countryside. He is especially attracted by spas, historic buildings and also likes to hunt. His wife, Ruth, is also active in diplomatic circles as the chairwoman of the club ‘Diplomatic Spouses Budapest’.