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Switzerland has vetoed a plan to export nearly 100 mothballed Leopard battle tanks to Ukraine, citing neutrality laws for a decision made just as Kyiv’s counteroffensive enters a decisive phase.

Bern’s veto is likely to spark anger among Switzerland’s European allies, who for months have been pressing the government to relax its restrictive interpretation of a long-cherished neutrality policy.

The tanks have never been in service in Switzerland, were never intended for use by the Swiss military and are not based in the country. All 96 are stored in Italy, having been acquired in 2016 from the Italian military in a private transaction by the Swiss arms manufacturer Ruag.

“The Federal Council has concluded that the sale of the 96 tanks is not possible under [Swiss] law as it stands. In particular, such a sale would contravene the War Materiel Act and would result in a shift from Switzerland’s policy of neutrality,” the Federal Council — the seven-person executive arm of the Swiss government — said on Wednesday afternoon.

The move is consistent with the Swiss government’s previous decisions, but nevertheless represents the single most consequential veto, in terms of lost military potential for Ukraine, that Bern has wielded.

The decision deepens the wealthy alpine country’s diplomatic isolation in Europe, as it tries to steer a path that protects one of its most venerated national political principles, while also seeking to maintain economic ties with the west and cast itself as a moral critic of Russian aggression.

In March, the US ambassador to Switzerland, Scott Miller, warned the country was facing its gravest geopolitical crisis since the second world war as a result of its intractable position over military aid to Ukraine.

France’s ambassador has said Switzerland’s stance makes the country “a problem for Europe”. Germany, meanwhile, has become increasingly critical of its neighbour, not least because Switzerland’s stubbornness stands in stark contrast to Berlin’s own dramatic Zeitenwende, or turning point, on military spending and lethal support for Kyiv.

Switzerland last October refused to allow Germany to donate antiquated Swiss-made anti-aircraft rounds held in German stockpiles to Ukraine, citing a clause requiring permission from Bern for their onward use.

For critics, the most recent veto again highlights the absurdity of Switzerland’s policy on arms exports when it comes to practical reality: the 96 tanks in question have never even been on Swiss soil, and were acquired from Italy’s military seven years ago as part of a commercial enterprise by Ruag. The company planned to sell them on to third countries anyway, after it had refurbished them.

Earlier this year Ruag requested a licence for their export to Germany’s Rheinmetall, on the understanding the company would then refurbish them and sell them on, with German government support, to Ukraine.

Swiss policy is shifting — but at an extremely slow pace. Opinion polls show a majority of Swiss voters favour a relaxation of policy to allow Swiss-made arms to be donated to help Kyiv.

Both houses of Switzerland’s parliament have meanwhile begun exploring ways to work around or modify existing laws. The centrist defence minister, Viola Amherd, has also advocated a change in Swiss policy.

The majority of her colleagues on the Federal Council, however, remain unconvinced, slowing any attempts at change.

Federal Councillor and current Swiss president Alain Berset has been particularly active in condemning any move that would lead to Swiss-made or Swiss-owned arms helping Ukraine. In an interview earlier this year he accused colleagues in government of warmongering. “Warfare is not part of the Swiss DNA,” he said.

Letter in response to this report:

Swiss neutral stance edges into ‘free-rider’ territory / From Ira Sohn, Emeritus professor of economics and finance, Montclair State University, Upper Montclair, NJ, US