The role of small states within the European Union has become an increasingly relevant topic amid growing institutional complexity and geopolitical uncertainty. While EU membership provides formal avenues for policy influence, smaller member states often face structural disadvantages compared to larger counterparts in shaping supranational outcomes. In this context, alternative models of influence merit closer examination. Switzerland, although not a member of the EU, represents a compelling case of external engagement that combines sectoral integration with the preservation of national sovereignty. Through a network of over 120 bilateral agreements, voluntary regulatory alignment, and targeted diplomatic efforts, Switzerland has maintained significant access to and influence over key areas of EU policymaking—particularly in financial and economic governance.

A key element of Switzerland’s strategy is the voluntary alignment of domestic legislation with EU standards in selected sectors. Areas such as financial regulation, product standards, and anti-money laundering policies reflect substantial convergence with EU law. Instruments such as the Financial Services Act and Financial Institutions Act incorporate key elements of EU directives like MiFID II and AMLD, facilitating market access and regulatory credibility. This selective harmonization enables Switzerland to participate in the single market while retaining the flexibility to diverge when politically or economically necessary. However, the lack of institutional guarantees exposes Switzerland to legal uncertainty, particularly when EU legislation evolves beyond the scope of existing agreements.

Without formal representation in EU decision-making bodies, Switzerland relies on soft power and diplomatic engagement to shape policy outcomes. Swiss missions in Brussels play an active role in technical consultations, informal dialogues, and policy monitoring. Moreover, Switzerland frequently builds coalitions with other small or non-EU states—such as Norway, Liechtenstein, and the United Kingdom—to share intelligence and coordinate positions in areas of common interest. Participation in global standard-setting bodies, including the OECD, BIS, and FATF, also allows Switzerland to contribute to the development of norms that the EU later adopts. This indirect influence illustrates the potential of diplomacy and international networking as tools for small state engagement in regional governance.

As a full member of the European Union since 2004, Hungary operates within a markedly different institutional environment compared to Switzerland. Unlike Switzerland’s external and selective engagement model, Hungary is embedded in the EU’s decision-making structures, including the European Council, the Council of the EU, the European Parliament, and the Committee of the Regions. This membership grants Hungary formal representation and voting rights, providing a direct channel for influencing EU legislation and policy development. However, the practical exercise of this influence is often constrained by the relative political and economic weight of larger member states and the dynamics of consensus-building within EU institutions.

Hungary's capacity to shape EU policy is shaped by both structural and strategic factors. Structurally, Hungary, as a smaller member state, despite formal equality, often possess limited bargaining power in intergovernmental negotiations. Strategically, Hungary has occasionally diverged from the mainstream EU agenda, particularly in areas such as migration, rule of law, and foreign policy. While this assertive posture has elevated Hungary’s visibility, it has also generated tensions with key institutional actors and other member states, potentially reducing its capacity for coalition-building and long-term influence.

Hungary retains important opportunities for strategic engagement. Its participation in regional alliances such as the Visegrád Group enhances its ability to shape policy discussions in areas of shared interest, such as energy security, border protection, and EU enlargement. In addition, Hungary has demonstrated leadership in selected policy domains, including digital taxation, family policy, and innovation financing, where smaller states can exercise disproportionate influence by developing expertise and forming cross-regional coalitions. Hungary’s EU membership offers institutional channels unavailable to Switzerland, such as access to permanent committees, the rotating Council presidency, and the right to nominate members to the European Commission and Court of Justice. These mechanisms, if strategically utilized, can enhance Hungary’s ability to shape the agenda and influence legislative outcomes. However, effective use of these tools requires consistent coalition-building, investment in diplomatic capacity, and alignment with broader EU priorities.

Switzerland’s engagement with the EU is rooted in a strategic approach that prioritizes sovereignty while enabling meaningful economic and regulatory integration. Following the 1992 rejection of the European Economic Area agreement, Switzerland adopted a model based on bilateral agreements, allowing it to access specific segments of the EU internal market without submitting to its governance. This bilateralism ensures that cooperation is structured around sectoral negotiations, preserving legislative autonomy and national discretion. Although this model excludes Switzerland from formal participation in EU institutions, it provides a flexible and selective framework defined by mutual interest.

Switzerland’s approach offers several lessons for Hungary as it seeks to strengthen its role within the European Union. First, the Swiss case illustrates the value of technical credibility and regulatory specialization. Hungary could enhance its influence by developing leadership in select policy areas—such as cybersecurity, AI governance, or green transition—where smaller states can shape debates through substantive contributions. Second, Switzerland’s use of coalition-building, both regionally and thematically, demonstrates the importance of strategic alliances. Hungary, with its established participation in the Visegrád Group and potential partnerships across Central and Eastern Europe, can leverage these networks to promote common interests more effectively within EU institutions.

The Swiss model underlines the importance of economic interdependence as a source of soft power. Hungary’s integration into EU industrial supply chains—particularly in the automotive, pharmaceutical, and energy sectors—constitutes a significant bargaining resource that could be used more consciously in negotiations. Switzerland’s investment in soft diplomacy suggests that influence is not merely a function of institutional rights, but also of engagement, expertise, and visibility. Hungary could benefit from further professionalizing its EU representation and increasing its involvement in the informal layers of EU policymaking, including think tanks, working groups, and regulatory forums.

The most transferable lesson lies in Switzerland’s ability to reconcile assertive national identity with constructive policy engagement. Hungary’s focus on national sovereignty need not preclude participation in the EU; rather, if paired with strategic competence and diplomatic engagement, it can position Hungary as a principled yet pragmatic actor in the Union’s evolving governance landscape. While institutional contexts differ, Switzerland’s example demonstrates that small states—whether inside or outside the EU—can exercise influence through coherent strategy, targeted investment in expertise, and agile diplomacy.

While Switzerland and Hungary differ fundamentally in their institutional relationship with the EU, both illustrate how small states can navigate power asymmetries through strategic adaptation. Switzerland’s model offers valuable insights—such as regulatory expertise, coalition-building, and economic leverage—that Hungary can apply within the EU. However, Hungary’s membership also entails legal obligations and institutional pathways that Switzerland lacks. Thus, while the Swiss example cannot be replicated wholesale, it provides a useful reference for enhancing Hungary’s EU engagement. Effective small state influence depends not on size, but on strategic clarity, diplomatic investment, and credible sectoral leadership.

Sources:

Baldur, T. (2012). Can small states influence policy in an EU of 25 members? University of Iceland. Retrieved from https://uni.hi.is/baldurt/files/2012/11/can_small_states_influence_policy_in_an_EU_of_25_members.pdf

Centre for European Policy Studies. (2020). Integration without membership: Switzerland’s bilateral agreements with the EU. Retrieved from https://www.ceps.eu/ceps-publications/integration-without-membership-switzerlands-bilateral-agreements-with-the-eu/

Chatham House. (2024). Orbán is using Hungary’s EU Council presidency to bulldoze EU norms. Retrieved from https://www.chathamhouse.org/2024/07/orban-using-hungarys-eu-council-presidency-bulldoze-eu-norms

European External Action Service. (n.d.). The European Union and Switzerland. Retrieved from https://www.eeas.europa.eu/switzerland/european-union-and-switzerland_en

European Parliament. (2024). EU-Switzerland relations. Retrieved from https://www.europarl.europa.eu/RegData/etudes/BRIE/2024/766264/EPRS_BRI%282024%29766264_EN.pdf

Hughes, K. (2020). Smaller states' strategies and influence in an EU of 27: Lessons for Scotland. Centre on Constitutional Change. Retrieved from https://www.centreonconstitutionalchange.ac.uk/sites/default/files/2020-03/Small-States-in-EU-6th-March-2020-SCER-UCL.pdf

Krotz, U., & Maher, R. (2011). International relations theory and the rise of European foreign and security policy. World Politics, 63(3), 548–579.

LSE EUROPP Blog. (2024). Mixed economic results and growing political conflict – Hungary's 20 years of EU membership. Retrieved from https://blogs.lse.ac.uk/europpblog/2024/12/27/mixed-economic-results-and-growing-political-conflict-hungarys-20-years-of-eu-membership/

Neubauer, C. (2024). European integration and Switzerland. Lund University. Retrieved from https://www.cfe.lu.se/en/sites/cfe.lu.se.en/files/2024-01/NEKP01_Essay_Neubauer_CFE_1.pdf

Oxford Research Encyclopedias. (n.d.). Hungary and the European Union. Retrieved from https://oxfordre.com/politics/display/10.1093/acrefore/9780190228637.001.0001/acrefore-9780190228637-e-1110

Panke, D. (2010). Small states in the European Union: Coping with structural disadvantages. Routledge.

Swiss Federal Department of Foreign Affairs. (n.d.). Switzerland’s policy on the European Union. Retrieved from https://www.eda.admin.ch/eda/en/fdfa/foreign-policy/switzerland-europe/swiss-policy-europe.html

Swissinfo.ch. (2025). The Swiss-EU bilateral treaty updates, explained. Retrieved from https://www.swissinfo.ch/eng/swiss-politics/the-swiss-eu-bilateral-treaty-updates-explained/88790104

The Guardian. (2025). The Guardian view on Hungary's anti-LGBTQ+ laws: Europe must stand up for its values. Retrieved from https://www.theguardian.com/commentisfree/2025/may/28/the-guardian-view-on-hungarys-anti-lgbtq-laws-europe-must-stand-up-for-its-values

UCL European Institute. (2020). Smaller states' strategies and influence in an EU of 27. Retrieved from https://www.ucl.ac.uk/european-institute/sites/european-institute/files/small_states_policy_paper.pd