Direct Democracy – more necessary than ever

This only exists in Switzerland: For years, the parliaments of the nine cantons that own 100 percent of Axpo Group argued about the “modernisation” of their contracts and ownership structures. The privatisation inciter’s calculation almost worked out: in eight cantons, the planned conversion of Axpo from a public service provider in the hands of the citizens to a pawn of foreign corporations passed the voters. Not a good testimony for us Swiss people who are committed to democracy! But then in Schaffhausen, a non-partisan committee, mainly made up of leftists and trade unionists, called for a referendum against the decision of their cantonal council, and the people of Schaffhausen voted 53 percent no to selling off Swiss electricity to foreign energy companies. That’s what happened on 18 August  2024. Shameful for the “people’s representatives” who approved the draft with 52 yes votes and a single vote against. To the delight of everyone who cares about the direct democratic decision-making power of the Swiss people and a strong public service.

Axpo – a centrepiece
of the Swiss public service

Axpo is the largest energy company in Switzerland, with over 100 power plants and a distribution network over 2,200 kilometres in length. Today it has long been a major international corporation with interests in power plants throughout Europe and even overseas. But and this is crucial, it still belongs 100 per cent to the nine cantons of Zurich, Aargau, St. Gallen, Appenzell Ausserrhoden, Appenzell Innerrhoden, Thurgau, Schaffhausen, Glarus and Zug. The NOK-Treaty (Northeast Swiss Power Plants) of 1914, which has been obtained until today, explicitly prohibits the sale of shares to private individuals. This protects the infrastructure, which covers 40 percent of Switzerland’s electricity needs and thus makes a significant contribution to the country’s security of supply, from private interests.

Planned privatisation in instalments

“A sell-out of Axpo is not possible with the new contract,” claims the Schaffhausen government council in its voting newspaper and continues: “In all cases, the majority of the shares remain in Swiss public hands. Axpo cannot therefore be privatised – contrary to the fears of the referendum committee”.¹ That is a bare-faced lie! It is hopeful that the Schaffhausen voters did not let this confuse their minds.
  The planned shareholder pooling agreement says something completely different. To make it less noticeable, the draft envisages the “opening” of Axpo to the electricity market in three tranches: 1. Five-year ban on the sale of shares, which means that they remain 100 % owned by the cantons (Art. 7.1 lock-up period), 2. Holding at least 51 percent of the shares in public hands after the lock-up period (Art. 7.3), 3. Free sale of shares after the fixed contract period of 8 years with the approval of at least 50 % of the share votes and at least five contracting parties (Articles 7.3, 7.4 and 14).²
  Voters are led to believe that this third step, the total sell-out of Axpo to large foreign corporations, will hardly take place: “From today’s perspective, it seems unrealistic that these conditions will be met due to the discussions held in the owner cantons and the legal adjustments made in the cantons of Zurich and Schaffhausen.” (Voting Magazine, p. 9) To ensure that this remains unrealistic in the future: simply delete it from the draft contract. Because we should wisely not rely on the assurances of our government councillors that they are committed to “ensuring that the Swiss network infrastructure, important power plants and storage facilities remain entirely in public hands”³. The Schaffhausen paper also states the complete opposite: “Axpo’s ability to act [with a no to the contract, mw] would remain restricted and it would be significantly weakened by the lack of, but necessary, strategic flexibility.” (p. 8)
  Now what? We prefer to have it in black and white and for the benefit of the population. This means: The relaxation and ultimately abolition of the ban on sales in accordance with Article 7 of the shareholder agreement must be deleted and instead a ban on sales must be enshrined in law in the cantons involved. A referendum could then be held against any subsequent maceration.

A modern contract for a
community-related public service

In a world in which global corporations (yet) have the say, the directly democratic Swiss state system is once again proving to be a rock in the surf. The previously valid founding agreement of the Nordostschweizer Kraftwerke (NOK) from 1914 “has long lagged behind today’s framework conditions”, according to the Schaffhauser Voting Magazine.
  Undoubtedly, some formulations could be adapted to today’s times, supporters and opponents agree. But the above-mentioned fact that 100 percent of the ownership of Swiss electricity is still in the hands of the Axpo cantons and their power plants and that the Swiss population shows little enthusiasm for its privatisation is considered to be “out of date”. According to the Schaffhausen government council, the electricity market was “open” to larger electricity consumers since 2009 (it fails to mention that this disregarded the will of the electorate, who voted no to opening the electricity market on 22 September 2002).
  In addition, Axpo is “no longer a regional energy supplier, but an internationally active group with approximately 7,000 employees” (p. 9). So, the regulation that corresponds to our state system needs to be adapted to the world of transnational companies? Or better the other way around? Stick to a contract that is not committed to maximising profits for energy companies, but rather to the well-being of the population. A regulation that focuses on public service for all inhabitants in cities and rural areas and, despite all counter currents, leaves the ownership of the electricity infrastructure in the public sector and thus subject to direct democratic control.

Consequence: out for the
framework agreement with the EU

It is known that many voters in other cantons also want a good public service in the hands of the state, and not just in the energy sector. If Switzerland were to negotiate a new framework agreement with Brussels, the cantons’ 100 percent ownership of Axpo would not be compatible with the EU ban on state aid. Without privatisation there is no electricity agreement, but also, for example, no “modernised” land transport agreement, according to which foreign railway companies are allowed to overrun and cream off the intact Swiss rail network and the functioning regular timetable.
  The Schaffhausen referendum on 18 August 2024 is therefore also an eye-opener for the pitfalls of an institutionalised set of rules with the EU.  •

¹ “Schaffhauser Voting Magazine for the referendum on August 18^th,” p. 9
² Shareholder binding agreement of the shareholders of Axpo Holding AG, draft dated 20 November 2018
³ Schaffhauser Voting Magazine, p. 9; similar to the Aargau government councillor Stephan Attiger in the Aargauer Zeitung of 24 August 2024 “Wie weiter mit der Axpo?” (“What next for Axpo?”)