Büsingen am Hochrhein is a small German municipality of about 1,500 inhabitants, entirely surrounded by Switzerland. It is located on the Rhine River within the Swiss canton of Schaffhausen, the only one north of the river, but politically belonging to the German state of Baden-Württemberg.
Long under Austrian control, the reasons for this special status lie in religious concerns that pushed the town of Büsingen to profess Catholicism and clash with neighboring Protestant Schaffhausen. In 1918, a referendum was held in which 96% of voters expressed their desire to join Switzerland, which, however, rejected the annexation.
In 1939, shortly after the outbreak of World War II, the British House of Lords formally requested the municipality to join Switzerland, but this request was rejected by both the municipality of Büsingen and, for reasons of neutrality, by the Swiss government.
In 1964, with the Treaty of Büsingen, which came into force in 1967, the two nations established the terms of management of the German exclave, which became economically part of the Swiss customs area. Its residents, treated as Swiss citizens, have easy access to the Swiss labor market.
In addition to the main village, Büsingen also has a small hamlet, Stemmer, which shares a border with Schaffhausen. The most widely used currency is the Swiss franc, despite the euro being the legal tender. The local football team is the only German team to play in the Swiss league. For urgent cases, both police forces can be contacted, but Swiss agents generally arrive more quickly due to the proximity, while postal and telecommunications services are dual.
Recently, the population has been literally decreasing, given the high German tax burden, which is pushing many citizens to relocate to Switzerland. This is offset by both the welfare services guaranteed by Berlin, which are encouraging more Germans to move to the enclave, and the lower rents, which are attracting Swiss retirees. It's no coincidence that the average age of the town is rising.
It should be noted that in the event of war or emergency, Switzerland is required to ensure the enclave's supplies, but is not responsible for its military defense, which is Germany's responsibility.
In short, the enclave would like to become fully Swiss, but a referendum alone is not enough. The German Constitution prohibits the transfer of national territory, while Swiss neutrality prohibits the acquisition of new territory.
Despite this, its citizens continue to feel utterly Swiss and celebrate every August 1st, the Swiss national holiday commemorating the birth of the Swiss Confederation.
(Sources: Tio.ch, Wikipedia, Ezv.ch, BBC)