Post Segments
Talking about Neighbours….
Swiss Broadcasting recently polled a sample of almost 20,000 Swiss for their views about the bilateral treaty proposed by the EU. To add some political perspective this new survey finds that although the Swiss population has little enthusiasm for the European Union, it regards the bilateral agreements with Brussels as important. Relations with the EU remain sensitive and highly controversial in Switzerland. The responses concerning agreements with the EU revealed extremely divided opinions.
The majority of the Swiss population recognise the importance of the EU for the Swiss economy. This rational, economic view is shared by all political hues. There is, however, a major fissure: on an emotional and personal level, a feeling of distance and indifference dominates in the hearts and minds of the Swiss. When the sample was asked about the state of official relations with the EU their answers revealed that 21% were satisfied but the rest were divided. While 37% thought Switzerland should move closer to the EU no less than 40% thought they were too close already!
Not at all close enough 12% Much too close 12%
Not close enough 25% Too close 28%
Ideal 21% Don’t know 2%
A critical view of the EU
The EU is viewed most critically in Italian-speaking Switzerland. In Ticino, prices and wages have come under severe pressure as a result of immigration from Italy.
Despite far-reaching criticism of the EU as an institution, its importance for the Swiss economy is widely and clearly recognised. Those who view the EU positively see it as a project for peace and prosperity. The positive view is also characterised by the idea of a European idea, a community of values with common goals and interests.
Majority see a bureaucratic monstrosity.
This approving view of the EU is supported by people who feel European and value relations with neighbouring countries but they are definitely a minority. The majority see the EU as a bureaucratic monstrosity that is denying Switzerland its right to have a say in how Europe is ruled and day to day managed. Respondent statements include: the EU is a bureaucratic juggernaut, it is not in a position to respond properly to the world’s major challenges and it is undemocratic.
The original batch of trade agreements with the Common Market was drawn up in 1972 by Ambassador Paul Jolles whose team of young negotiators became known affectionately (in most cases but not all!) as the Basel Mafia although Paul himself came from Bern. His deputy, Arthur Dunkel, still in thirties, negotiated the General Agreement on Tariffs and Trade (GATT) which become the World Trade Organisation (WTO). Switzerland was the architect of the existing trade structure and I was lucky enough to serve in the British Embassy at the time. Paul Jolles split up the agreements with the EU into trade sectors to avoid giving Brussels any opening for leverage by later deploying one agreement against another. He became known as the eighth Federal Councillor with the rank of State-Secretary invented for him. The EU last attempted to renegotiate in 2022 but failed when the Swiss rejected their terms.
The Finishing Post?
Swiss president last year, Viola Amherd, wished to seal a framework deal by the end of 2024 to update relations with the European Union. On Friday the 20 December Ursula von der Leyen came to Bern for a press conference where she and Viola Amherd announced that after nearly 200 meetings, negotiations between Switzerland and the European Union had been completed to update their trading relationship. Their objectives had been achieved in all areas. The formal signing of the deal is scheduled for spring 2025. The Swiss Parliament will also have their say in 2026.
An early report on the terms came from Reuters’ Zurich bureau. The European Union and Switzerland, the bloc’s fourth largest export market – reached a political deal on Friday 20 December to overhaul their trade ties, setting in motion a lengthy approval process. The two parties hope to formally conclude their negotiation in the spring after which the package of measures faces parliamentary hurdles and a likely referendum in Switzerland.
New Agreements on Electricity, Food Safety and Health.
An electricity deal that has been long in the making integrates Switzerland into the bloc’s grid, helping stabilise networks and allowing the EU to draw on Swiss hydropower. The accord worries some Swiss grid operators, who fear disadvantages from market liberalisation.
An agreement on food safety provides for Swiss access to the European Food Safety Authority and reduces trade barriers.
An accord on health addresses cross-border threats by improving crisis prevention and ensuring continuous cooperation between EU and Swiss authorities.
Dispute Resolution
In order to satisfy a core EU demand, Switzerland agreed on a mechanism to align laws with relevant EU legislation, subject to constitutional safeguards, and on a way to handle disputes.
If a joint EU-Swiss committee fails to solve a dispute, cases will move to an arbitration panel, which must consult the European Court of Justice for interpretation. Critics point out this is a hold up that hands the Swiss to the EU on a plate. I discussed this proposal with a group of Swiss friends. Did that mean Switzerland was obliged to keep in step with the EU on regulating Artificial Intelligence development? If it did, Switzerland would fall far behind America, Britain and the Pacific. Their consensus was that if Parliament didn’t reject this, the people would in a referendum. Indeed, there might more than one people’s vote.
Both parties can take proportionate measures across market access treaties to compensate for imbalances stemming from an unresolved dispute. Again it’s 9 million Swiss against fifty times as many EU citizens.
Swiss opposition to the deal has centred on the argument that Switzerland should not be subject to the dictates of EU courts that infringe on its ability to set policy. Moreover, the Swiss people have enjoyed direct democracy for eight-hundred years. As a Swiss friend pointed out, ‘if I wanted to become German, Adrian, I’d drive over the bridge at Rheinfelden just before Basel.’
Protection Clause’ on Immigration.
Swiss officials have been seeking to agree terms under which they can control immigration from the EU, a sensitive topic for the bloc as officials worry that notable concessions would encourage member states to seek their own opt-outs.
The Swiss government said it secured a protection clause to address serious economic or social issues relating to immigration using an arbitration mechanism.
The EU can take proportionate measures to compensate for Swiss restrictions on immigration that it does not agree on. Such measures could no longer target areas beyond market access like research or health, the Swiss government said.
Research, State Aid.
When Switzerland refused to sign a previously negotiated deal with the EU in 2021, it lost access to the bloc’s research, innovation and educational programs. The new deal reinstates Switzerland’s participation.
Furthermore, the deal clarifies rules and exceptions around state aid to bolster weak regions or promote green technologies.
The bill is in the post.
The price for Swiss market access to the EU was long on the bargaining table. Switzerland said on Friday 20 December that it would pay 350 million Swiss francs (£346 million) a year from 2030 after a transition phase.
Switzerland has financed development projects in Eastern Europe since 2007, paying 130 million Swiss francs a year. Switzerland described this sum as a voluntary contribution. Under the new agreement, the contributions are legally binding.
Ratification
Switzerland may split up the deal into different packages for approval, submitting new sections and updates to existing accords separately.
Parliamentary consideration is expected to start in 2026 and the deal is almost certain to face a national referendum, perhaps more than one.
Politicians backing a deal are nervous that it could become a focal point of federal elections in 2027. Some want to ensure that there is no referendum before 2028.
A ratified deal may come into force in 2030.
Opposition comes from the political right, which has long depicted the EU as an over-regulated and bureaucratic threat to Switzerland’s market economy. But the EU deal faces stiff opposition from right and left-wing parties in Switzerland, who could organise referendums against any new legislation.
Labour unions may also oppose the deal, arguing that a huge rise in immigration through free movement of people risks undercutting the wages of Swiss, business, industry and professional services. Academia and medicine are packed with Germans. The Swiss also worry that they having created one of the world’s most highly efficient economies, becoming a satellite of the EU with its ever increasing burden of regulation, cannot but damage their economy. Last year, at one point, the Swiss had to ban German express trains from their network because they were becoming so late that they disrupted the domestic trains which run like clockwork.
Viola Amherst, Federal Councillor for Defence and Sport, also last year’s President, resigned almost as the ink dried. From January 1, 2025, the Swiss will have access to almost all calls for tender under the EU’s Horizon Europe, Euratom and Digital Europe programmes. This has been made possible by an arrangement for a transitional period from the end of 2024 until the negotiated package comes into force.
Lesson for Britain.
Never have a trade treaty with the EU. As the Swiss have learnt to their cost, negotiations for creeping takeover become a never-ending fact of life. When our own trade agreement with the EU comes up for revue next year, scrap it along with the Windsor Framework and trade with the EU on WTO terms. They’ll get used to it.
