Lived direct democracy

While Swiss EU proponents are working hard to prevent a mandatory referendum on one of the most important voting proposals, the Switzerland-EU Framework Agreement 2.0,¹ the referendum by public authorities is a frequently used instrument of practical direct democracy in many cantons and municipalities. A late-breaking example from the canton of St. Gallen.

On May 18, 2025, a referendum took place in the canton of St. Gallen on two proposals whose significance for the future of direct democracy certainly cannot be compared with the EU Framework Treaty. But the fact that this vote took place at all and how the people decided – significantly different from what the parliamentary majority wanted – provides insight into Switzerland’s unique, lived democracy. Anyone willing to acknowledge these facts will understand, or at least sense, that the Swiss and EU political systems are like fire and water.

Financial equalisation and store opening hours:
What should be changed

One of the proposals concerned an amendment to the St. Gallen Financial Equalisation Act, which was primarily intended to increase the equalisation of central burdens for the city of St. Gallen. Intra-cantonal financial equalisation compensates for financial differences between municipalities. Municipalities with lower tax capacity and above-average financial burdens receive equalisation contributions from the canton. Currently, this applies to 65 of 75 municipalities. As the capital, St. Gallen already receives special compensation for its central burdens, and this was to be increased again with a legislative amendment. The Cantonal Council (Parliament) voted 72 in favour to 42 against (4 abstentions) for the increase.
  The second proposal sought to liberalise the cantonal regulated shop opening hours. Currently, retail stores are permitted to be open Monday through Friday from 6:00 a.m. to 7:00 p.m., and Saturday from 6:00 a.m. to 5:00 p.m. Longer opening hours are permitted for kiosks, shops at gas stations, train stations, and motorway service areas. From now on, all retail stores would be permitted to open Monday through Saturday from 5:00 a.m. to 10:00 p.m. The Cantonal Council voted 60 to 42 (with 10 abstentions) in favour of the corresponding amendment to the law on rest days and shop opening hours.

Direct democracy takes effect:
Council referendum and popular vote

Article 49 of the Constitution of the Canton of St. Gallen stipulates that an optional referendum can be used to call for a popular vote on laws, intergovernmental agreements, and new government spending above a legally stipulated amount.
  A special feature that further strengthens the citizens’ right to direct democratic decision-making is the council referendum. In the Canton of St. Gallen, for example, the referendum can be initiated not only by 4,000 voters, but also by one-third of the members of the cantonal council (at least 40 of 120 members). Forty-three cantonal council members initiated this council referendum against the parliamentary decision on the financial equalisation law and 50 against the decision to extend store opening hours. Similar regulations exist in many other cantons and municipalities in Switzerland.
  The two referendums held on May 18 were unequivocal. The people decided differently than parliament. With nearly 58 per cent voting against and 42 per cent voting in favour, the people of St. Gallen rejected a further increase in the financial equalisation for the city of St. Gallen. Apart from the city of St. Gallen itself, only two of the 75 municipalities voted in favour of the proposal. Their reasons for doing so were quite varied.
  One could say that the rural population, which is mindful of budgetary austerity, has urged the authorities of their capital to restrain in their spending as well. Among the arguments of the opponents in the Cantonal Council: St. Gallen is already the only city in the canton to receive a central burden equalisation, which was increased a few years ago; the capital not only has central burdens, but also significant central benefits (many well-paid jobs at cantonal authorities, state-owned enterprises, and numerous companies). And here is a typical argument from the thrifty rural population: The city of St. Gallen must get its finances under control: “A ‘no’ vote will force it to rethink its current spending policy.” (Balloting brochure, p. 20)
  The St. Gallen electorate rejected the extension of store opening hours even more clearly: more than 64 per cent voted against and 35 per cent voted in favour. Only one municipality voted in favour.
  From the opponents’ argument: “Small shops don’t want longer opening hours. Longer opening hours don’t guarantee increased sales. The opposite is true: personnel costs rise and burden the business.” “Only large retailers benefit, and the pressure on other businesses increases.” “The longer opening hours are unnecessary.” “The sales staff, who are already under severe strain due to irregular working hours, are not receiving sufficient protection.” (Balloting brochure, p. 31 and p. 39)

Council / parliament referendums
for important voting proposals
also essential at the federal level

These two cantonal votes show us that the great power of Swiss-style direct democracy lies not only in the citizens’ right to say yes or no – of course, that is also true. Equally important is people’s political education, the formation of differentiated opinions, the discussion of individual ballot proposals, but also the knowledge and inner feeling that each of us is responsible for safeguarding the fundamental pillars of the Swiss model.
  Let’s return to the upcoming referendum on the framework agreement with the EU, the text of which we will soon be able to read, according to the Federal Council. A deeper understanding of the content of this far more demanding proposal, and the awareness that the acceptance of this package would undermine Switzerland’s entire understanding of the state, will require considerable time and civic engagement from us citizens.
  The political significance of the framework agreement undoubtedly justifies a mandatory referendum initiated by Parliament with a majority of the people and the cantons. If a cantonal parliament has the democratic sensitivity to allow a referendum on financial equalisation and store opening hours without collecting signatures, with the foresighted assumption that the people might think differently than Parliament, the federal parliament should “for heaven’s sake” show the same greatness. •

¹ See “Federal Council wants to overrule the sovereign“. In: Current Concerns, No. 11, 13 May 2025