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The history of Switzerland has followed a broadly different course from that of its European neighbors, mainly because no ruler since the 14th century was able to claim more than a theoretical suzerainty over the small, well-organized and prosperous group of cantons that comprise it. In the period between 1315 and 1388, they inflicted a series of crushing defeats on the armies of the Dukes of Austria, resulting in several other cantons joining the original three in the Swiss Confederation. Their location left them well placed to interfere in the interminable power struggles of the period, and their influence was backed up by the formidable reputation of their army - probably the most powerful in Europe at the end of the 15th century.

The Reformation led to a division in Swiss society between the followers of the reformer Zwingli (later, Calvin) and the Catholics. The bitter controversy considerably reduced Swiss influence in Europe and the Confederation was lucky to survive a series of defeats. Swiss independence from the Holy Roman Empire was one of the results of the Peace of Westphalia (1648) that concluded the Thirty Years' War, in which Switzerland had suffered badly. In the following 100 years, little progress was made towards a formal union of the cantons and the religious controversy rumbled on; the dominance of the Protestants was not established until after the Second Villmergen War in 1712.

The dramatic events of the French Revolution and the Napoleonic Empire resulted in a confusing period, with much of the country being annexed by France. Independence was restored by the Congress of Vienna in 1815 (which also laid down the principle of the perpetual neutrality of Switzerland) but the repressive policies of the cantons and the lack of any central power continued to work against political unity and economic growth. It was not until the end of the 19th century that the federal government began to be truly effective, although the cantons continued to enjoy wide powers and do so to this day.

Domestic politics since 1945 have been dominated by four political parties the Social Democrats, Radical Democrats, the Swiss People's Party and the Christian Democratic People's Party, who have consistently governed the country in various coalition combinations. The general election in October 1999 was notable for the substantial gains made by the Swiss People's Party (SVP), which moved sharply to the right during the 1990s and sought to build its electoral position by exploiting fears about the level of foreign immigration into Switzerland. In common with other European far-right parties, the strategy has been fairly successful and the SVP made yet further gains at the most recent poll in October 2003 gaining almost 28 per cent of the vote.

The principal long-term question in Swiss politics has been relations with the European Union, which accounts for 50 per cent of Switzerland's trade. The main popular concerns are the likely erosion of cantonal power (a central feature of the Swiss political system), immigration levels and the loss of the country's cherished neutrality. The division was also apparent from the result of the referendum on Swiss membership of the European Economic Area, a free-trade agreement between the EU and EFTA (of which Switzerland is a member), held in December 1992. Opponents of the pact narrowly won. Among the people, there is a rough division by age: younger people tend to favor closer links with Europe; the older tend to place more value on neutrality.

Given Switzerland's continuing prosperity, economic arguments are rarely heard, although there is a broad acceptance especially in the financial community that the Euro will become a standard feature of commercial life in the near future. In 2001, two years after the inauguration of the Euro, the Swiss people voted again in a referendum to enhance links with the EU while endorsing a promise by the major parties that they would never countenance actually joining the EU.