The Holdouts: Neither Old Nor New; Switzerland and Norway have stubbornly resisted joining the EU, and so far they haven't suffered any great consequences.

Byline: William Underhill

Lukas Engelberger's favorite cause looks like a loser. For 12 years the Basel lawyer has campaigned for Swiss membership in the European Union. Yet in 2001 a thumping 76 percent of his countymen voted against it, including his own cosmopolitan Basel, wedged between France and Germany. Does Engelberger foresee eventual success? "Not in 10 years," he replies. "Maybe in 25."

Maybe, indeed. For Europe's refuseniks--the Swiss and Norwegians, who keep saying no to the EU--sovereignty trumps any possible economic benefits of membership. They are poster boys for hardcore Europhobes: their prosperity supports the idea that withdrawing from the EU doesn't spell ruin. Says John Whittaker of the United Kingdom Independence Party, which campaigns for a British pull-out: "By some measures, their standards of living are actually rather higher than the EU average."

Yet exclusion does have a price. Once an island of prosperity, Switzerland's economy in recent years has grown slower than the EU norm. Shunning the union has shielded inefficient industries from competition. A protected home market--Swiss farmers enjoy some of the world's richest subsidies--translates to higher prices for buyers. Canny shoppers along the border cut their grocery costs by strolling across the frontier; bread costs 20 percent less in France. Norwegians head for Sweden.

Worst of all, the holdouts must conform to many EU edicts anyway--to keep on good terms with their biggest trading partner. Thus Switzerland this summer bowed to EU pressure and adopted a direct tax on the savings of nonresident EU citizens held ...