Switzerland is not a part of the EU. It is, however, completely surrounded by EU countries. As such, it depends on the EU an enormous amount for trade. Which means it needs access to the EU Single Market (so it can trade with EU countries without paying the tariffs that non-EU countries normally have to pay). To this end, Switzerland has signed a series of bilateral trade agreements with the EU to give it access to the Single Market. But there is, of course, a catch...
A "guillotine" clause exists in the trade agreements. The EU is able to sever all of these agreements should Switzerland fail to comply with certain EU legislation. And thus Switzerland has been forced to adopt more and more EU law if it wants to keep trading on equal terms with the EU. It has no say in the decision-making process (because it is not an EU member-state) but it nonetheless has to adopt the legislation.
Tomorrow, the guillotine may be coming down. Swiss citizens will be voting on whether to extend labour rights to Romanian and Bulgarian citizens (these countries being the two most recent countries to join the EU). If they vote "no" - it could cut Switzerland's ties to the Single Market.
Not a good thing to happen to Switzerland during a global recession.
UPDATE: Switzerland has voted "Yes" - and so will keep access to the Single Market in exchange for opening its borders to labour from Romania and Bulgaria.
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I'm living in Italy and taking European & International Studies at the University of Trento. My current mission in life is to learn as much as I can about Europe, her past, peoples, foods, cultures, crimes, triumphs and her place in the world. I want to know the whole shmeer! Warts and all!