A LOOK AT THE PAST
About 2,500 years ago, a people known as the Helvetians lived in what is now western Switzerland and the Rhaetians controlled the area to the east. The Romans conquered the territory in the 1st century B.C. and remained in control for four centuries. From the 3rd to the 6th century A.D., the region was settled by Germanic tribes. Much of present-day Switzerland became part of the Holy Roman Empire during the 11th century, although many communities were largely self-governing.

 The German Habsburg family ruled the Empire in the 13th century. When the Habsburgs tried to establish feudalism in Switzerland, the Swiss resisted. In 1291, the people in the districts of Uri, Schwyz and Unterwalden united in a defence league against the Habsburgs. Gradually other cities and districts joined the league. Between the 13th and 15th centuries, administrative units known as cantons formed a loose confederation.
The Swiss gained independence from the Holy Roman Emperor Maximilian I in 1499 and expanded their territory by invading nearby areas. However, in 1515, they were defeated by the combined forces of the French and Venetians at the battle of Marignano. Realizing that they could no longer compete against these larger powers, they stopped their expansion efforts and declared neutrality.

 In the 16th century, Switzerland and the rest of Europe were thrown into turmoil by the Protestant Reformation. Reformers such as Ulrich Zwingli and John Calvin opposed the Roman Catholic church. Civil war broke out between Catholics and Protestants. However, while the rest of Europe was engaged in the Thirty Years' War (1618-48), the Swiss maintained their neutrality. At the end of the war, they were recognized by the Treaty of Westphalia as an independent, neutral state. 
  Did you know?
Because of its policy of neutrality, Switzerland has not been directly involved in foreign wars, but many Swiss have served as mercenaries in other countries over the centuries. The Swiss Guards, who serve in the Vatican, are the only remaining Swiss mercenary force.
In 1798, the French armies of Napoleon invaded Switzerland. In 1815, when Napoleon was overthrown, the European powers convened the Congress of Vienna, which upheld Swiss neutrality. In 1848, a new federal constitution was drawn up, which remains largely in place today. The constitution recognized 22 (later 23) cantons, protected individual civil liberties, and established representative democracy. Bern became the capital.

 The Swiss have guarded their neutrality in the 20th century, despite conflict between the French and German sectors during the First World War. During the Second World War, fearing invasion by Germany, Switzerland mobilized an army of nearly 500,000 to protect itself, but the country never went to war.
After the war, Switzerland expanded its commercial, financial and industrial base. In recent years, the Swiss have been criticized for their non-military roles in the Second World War. Questions have been raised about the roles of Swiss banks in concealing the ownership of assets belonging to German Jewish Holocaust victims. In 1997, the three largest Swiss banks set up a $1.25 billion fund to compensate the families of Holocaust victims. A commission has also been established to determine the nature of Switzerland's wartime financial activities.