The Swiss Federal Council officially approved the "2026 Security Policy Strategy" on September 18 to address the deteriorating international security situation. The strategy establishes three main goals: enhance resilience, improve protection, and strengthen defense capabilities, involving collaborative participation from the federal government, cantons, municipalities, businesses, academia, and civil society.

The strategy includes 10 objectives and 46 specific measures, focusing on addressing risks such as hybrid threats, remote and drone attacks, and organized crime; a public consultation was held from December 2025 to March 2026, with positive overall feedback on the analysis of the security situation, comprehensive policy ideas, and priority directions. The implementation of the strategy will be coordinated by a steering committee led by the Swiss State Secretariat for Security Policy (SEPOS), with the Federal Council set to receive a report on the implementation status by the end of 2028.

Defense Minister Martin Pfister announced that a specialized drone battalion will be established by 2028 as one of the specific measures to enhance defense capabilities; the strategy also highlights the regional security impacts of the Russia-Ukraine war, risks from hybrid and remote attacks, and Switzerland's dependence on external critical resources as major driving factors for this strategic adjustment.

Data shows that Switzerland's defense spending in 2026 is expected to be about $7.5 billion, accounting for approximately 0.8% of GDP, an increase of about 5% from $7.2 billion in 2025; this ratio is significantly lower than the historical peak of 3.0% in 1958 and the historical average of 1.5% since then. The Swiss government aims to raise the defense spending to 1% of GDP within the next six years, with Pfister proposing to increase the VAT rate from 8.1% by 0.8 percentage points to 8.9% to raise about 31 billion Swiss francs for defense funding, but a poll in February showed that 76% of respondents opposed the VAT increase.

Switzerland has long pursued a policy of armed neutrality, but several experts, including military strategist Marcel Berni, point out that "neither Russia nor NATO sees Switzerland as a truly neutral country anymore," which is an important background for the strategy's emphasis on strengthening defense capabilities rather than solely relying on its neutral status. Meanwhile, several European governments have expressed intentions to raise defense spending to 5% of GDP, creating a stark contrast with Switzerland's current target of less than 1%.

From the perspective of resource and budget allocation, the path for expanding Switzerland's defense budget has become relatively clear after the strategy's approval—if the VAT increase proposal is approved, it will provide a stable funding source of about 31 billion Swiss francs for specific equipment and capability-building projects such as the establishment of a drone battalion. This means that incremental fiscal resources will shift from the consumer side (all taxpayers) to the defense industry and arms procurement; for Swiss and European defense contractors, this represents potential order increases, especially for procurement needs related to drones and air defense countermeasures against hybrid threats; however, due to the 76% public opposition to tax increases, there remains political uncertainty about whether this funding will materialize, and the actual pace of Switzerland's defense spending acceleration may be slower than the official six-year target.

Source: Public Information