This paper surveys the linguistic situation in Switzerland, a country where a number of diverse languages are spoken, concentrating on two main problem areas and thereby following two main trends in Swiss language policy. On the one hand, the linguistic situation of German-speaking Switzerland is discussed with the problem of diglossia in focus. The relationship between the Standard German of Switzerland and Swiss German (a cover term for the German dialects spoken in Switzerland) is a much-debated one. 'Functional diglossia' as a term describing that relationship is not adequate for a number of cases. It would be more felicitous to speak of 'medial diglossia', even though that term does not perfectly describe the current situation, either. The paper therefore also introduces two alternative models, that of productive/receptive diglossia, and that of transition to bilingualism. - The other problem area discussed involves the possible ways of describing the communication between the various language groups. The myth of peaceful linguistic coexistence in Switzerland is challenged by Switzerland being a multilingual rather than quadrilingual country today, as well as by the fact that it is characterized by territorial monolingualism. The paper presents two types of communication between inhabitants of the parts of the country with distinct mother tongues. One, the partner language model is soon discarded, and the other, the lingua franca model is concluded to be a more realistic description of the situation. The problem with the latter model is, however, that neither one of the national languages nor English seems to be fit at the moment for introduction as an official lingua franca, even though English plays an increasingly dominant role on the linguistic palette of Switzerland, multicoloured as it is to begin with. - Finally, Switzerland can be seen as a kind of small-scale model of Europe in which the problems, possibilities and challenges that multicultural and multilingual Europe will have to face can be conveniently studied.