From its feudal origins and periods of political turmoil, modern Switzerland has evolved as a federally-constructed democracy and has never had a royal family of its own. Switzerland is governed by a collegial government and the political system is described by Federal Chancellor Corina Casanova as one "built on consensus and compromise". The four major political parties generally represent the people by sharing in a coalition government. On the continental stage, Switzerland works cooperatively with the EU (European Union) in a range of issues of European and global impact, but continues to maintain a political independence from the organisation in spite of pressure to fall in with European neighbours. Internationally, Switzerland is one of the twenty largest contributors to the UN.

Uniquely, the Head of State in Switzerland is not an individual but an elected Federal Council (Bundesrat / Conseil Fédéral). This comprises of seven members each with his or her own executive responsibilities. Annually, and on a rotating basis, a President is selected from the Federal Council members. The role of President is something of a political figurehead and confers no additional powers over and above those ordinarily held as a Departmental Head of the Federal Council. However, the President has an important role in representing Switzerland internationally. The current (2011) President of the Federal Council is Micheline Calmy-Rey.

Each member of the Federal Council holds responsibility for one of the following: Foreign Affairs; Environment, Transport, Energy and Communications; Finance; Defence, Civil Protection and Sports; Home Affairs; Justice and Police; Economic Affairs. The Federal Chancellor, considered the eighth member, has a subsidiary role and assists the Council. In 2010 there was for the first time a female-dominated Council with four women and three men, assisted by a female Chancellor.

The Swiss Parliament is comprised of the National Council, representing the people, and the Council of States, representing the cantons.

The most important political landmark for modern Switzerland was 12th September 1848, the date on which the first federal constitution created by and for the Swiss people was adopted. This was also the inaugural year of the Federal Council, with the election of the first seven members. The national flag of a white Greek cross on a red square dates from the 1800s, becoming official in 1889. Variations on the Swiss flag have been in use since the beginning of the Confederation in the fourteenth and fifteenth centuries.

Switzerland was affected by the faltering economy of the first part of the 1900s, however prospered during the later years of the twentieth century. A strongly independent nation, Switzerland is famous for its policy of neutrality and was one of the very few European countries not involved in active fighting in the First and Second World Wars. This position has inevitably drawn some criticism.

Although Swiss Parliament agreed that women should be eligible to vote in 1958, in itself a late milestone, in reality women did not receive full voting rights in Switzerland until 1971. The first female member of the Federal Council was Elisabeth Kopp, elected in 1984. The first female President of the Confederation was Ruth Dreifuss, taking up the position in 1999.

Jura was created as the 26th and final canton in 1978. Following the extensive revisions of 1999, Switzerland began the twenty-first century with a fully updated Federal Constitution.

The Swiss Parliament is elected by the people of Switzerland every four years. Those with the right to vote are Swiss citizens aged 18 and over. The right to vote is not extended to residents of foreign nationality.

The result of these elections determines which candidates will take the 200 seats on the National Council. The membership of the Council of States, made up of 46 seats, is likewise determined by the people in a popular ballot. Voters also have a say in federal proposals, decided by popular ballots occurring in general four times each year. The Swiss people hold substantial powers within Swiss democracy and, if they can demonstrate sufficient support, have the right to request amendments to the Constitution and to call for referendums by popular ballot.

The chief political parties are the Swiss People's Party (SVP), the Swiss Social Democratic Party (SP), the Christian Democrat People's Party (CVP), and a party known as FDP.The Liberals which was formed in 2009 from two formerly separate political parties. Smaller parties represent environmental concerns, religious values, alternatives to the major parties on both left and right, and regional issues.

Having retained an independent currency, Switzerland has been to some degree insulated from the economic turmoil in Europe. Swiss policies on employment also tend to protect citizens in times of financial crisis, and Switzerland has not been affected as badly by the recent recession as many European neighbours. According to the European Commission's Eurostat service, inflation in 2010 was 0.6%, in comparison to 1.2% in Germany, 1.7% in France, 3.3% in the UK, and 4.7% in Greece. The Swiss National Bank has predicted inflation of 0.9% for 2011, rising to 1.7% during 2013.

However, the Swiss economy has challenges to face in reconciling the strong Swiss Franc with the export industry and must also cope with higher oil prices. The base rate for interest (the three-month Libor rate), as regulated by the Swiss National Bank, was held at a low of 0.25% during the summer of 2011. Unemployment fell steadily over the first half of 2011.