Playing for time

The Federal Council will only sign the Swiss-EU framework agreement once a number of contentious points have been resolved. This could still take quite a while. The new European Commission is unlikely to show any greater flexibility in its dealings with Berne. So far, the Swiss tactic of playing for time has done little harm.

Safeguarding Swiss wage levels is one of the Federal Council’s main objectives. Photo: Keystone

European Commission President Ursula von der Leyen is unlikely to give Switzerland much wiggle room, because Brexit has forced the EU to act tough towards non-EU countries.

President of the Swiss Confederation Ueli Maurer has no option but to defend a framework agreement that his own party, the SVP, has called into serious question.

The draft institutional framework agreement designed to govern the future bilateral relationship between Switzerland and the European Union (EU) has been on the table for nine months. Although this treaty with Switzerland’s biggesttrading partner is of tremendous importance, the Federal Council remained tight-lipped for a long time – only deciding to open up just before the summer recess after months of consultation involving the country’s main stakeholders. It explained in June that Switzerland could not accept the draft in its present form, and that further clarifications were necessary. The Federal Council consciously avoided mentioning the word “renegotiation” in its letter to EU Commission President Jean-Claude Juncker, given that the EU is categorically ruling out further talks.

Specifically, the Federal Council wants clarification on three aspects of the text which it believes will not gain majority support as the text stands because of internal political opposition: wage protection, state subsidies, and the Citizens’ Rights Directive (“Swiss Review” 2/2019). The first of these points concerns the Federal Council’s wish to safeguard Swiss wage levels. With regard to state subsidies, the government wants to ensure that Switzerland only has to apply relevant EU guidelines when access to the EU single market has been contractually agreed. Thirdly, the Federal Council wishes to clarify that no provision of the framework agreement will be interpreted as an obligation for Switzerland to adopt the Citizens’ Rights Directive, which defines the reciprocal right to free movement within the EU and extends to other areas such as entitlement to welfare benefits.

Ratification unlikely before Juncker’s departure

The question is whether “clarifications” are actually enough to resolve these issues, or whether new talks are needed. The present European Commission, responsible under Jean-Claude Juncker for negotiating the framework deal with Switzerland, steps down at the end of October, so the clock is ticking either way. President of the Swiss Confederation Ueli Maurer (Swiss People’s Party, SVP) said at the beginning of August that he did not expect a solution to be found by the end of Juncker’s term in office. However, talks are unlikely to get any easier under the new European Commission President Ursula von der Leyen. Maurer nevertheless believes that Switzerland has time on its side. “And we need time for a solution that serves Switzerland’s interests,” he added. His party, the SVP, wants to abandon free movement completely, having launched an initiative calling for “moderate immigration” – which the National Council is set to debate during its autumn session.

At the time of going to press, there was still no Swiss consensus on wage protection. The Federal Council had called on the unions and employers to spend the summer working out what proposals they can put to the EU. But the union boss Pierre-Yves Maillard has already indicated his unwillingness to budge. Maillard is also playing for time and wants Brussels to cede ground on wage protection, suggesting that Switzerland increase its financial contributions in return – as exemplified by past cohesion payments to support EU enlargement in Eastern Europe (the “eastern billion”).

One possible scenario is that the SVP’s limitation initiative is put to the people in 2020 before the framework deal is signed. The electorate voting against an end to free movement would not only be a de facto endorsement of Switzerland’s bilateral approach, but would also strengthen the Federal Council’s position.

So far, the tactic of playing for time on the institutional framework agreement has not done Switzerland much harm. The EU decided not to renew the Swiss stock exchange’s “equivalence” status on 1 July, but measures taken by the Federal Council to protect securities trading on the Swiss stock market seem to have worked.

Brexit limits wiggle room

However, more concerning for the economy is the prospect of existing bilateral agreements being eroded. Unless progress is made on the framework deal, the EU will not necessarily feel inclined to update existing treaties. For instance, the bilateral agreement on technical barriers to trade (MRA) has to be adapted by May 2020 – otherwise Swiss medtech companies could lose direct access to the EU single market. Essentially, the bureaucratic hurdles would be higher and the costs greater. There is a lot at stake for the economy, given that Switzerland earns one in three francs from trade with the EU. The bilateral treaties account for trade in goods worth one billion francs each day. Free access to the European market is therefore vital to the Swiss economy.

The spectre of Brexit is anything but helpful to Switzerland. Faced with the UK leaving the EU, Brussels is doing all it can to make non-membership of the bloc as unattractive as possible. That is the message being given to Switzerland, whom the EU accuses of cherry-picking. Some observers believe that Brussels would have given Berne more flexibility were it not for the need to appear tough on Brexit.

 

This article reflects the information available at the time of going to press at the beginning of August. Previous article on this issue: ogy.de/CH-EU

 

Comments (8)
  • Jürg Schwendener, Phuket, Thailand
    Jürg Schwendener, Phuket, Thailand at 19.09.2019
    Die EU-Kommission war schon lange vor dem BREXIT nie bereit, vernünftig mit der Schweiz zu verhandeln, sondern die Schweiz musste ohne grosse Gegenleistung die Personenfreizügigkeit übernehmen. Dies hat zu einer enormen Zunahme der ausländischen Bevölkerung geführt und belastet die Infrastruktur der Schweiz. Der von der Schweizer Delegation unausgereift verhandelte Rahmenvertrag verbirgt viel mehr Abhängigkeit und Diktat der EU als zugegeben wird. Der Bundesrat weiss dies und hat deshalb auch Angst vor einer Volksabstimmung.
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    • Thomas Rettenmund, Wanneperveen, NL
      Thomas Rettenmund, Wanneperveen, NL at 21.09.2019
      Nun, die Zeiten wo "die kleine Schweiz" sich grösser gebärdete als sie wirklich ist, sind eben vorbei. Zudem profitiert vorwiegend die CH-Exportindustrie massiv von dem grössten Wirtschaftsraum in der westlichen Welt. Aber auch der einfache Bürger, z.B. Garantieleistungen auf 2 Jahre, Konsumentenschutz, Preisrückerstattung bei verspäteten Reisen (Flugzeuge, Bahn) usw. usf.
      Nur einfach egozentrisch seine Bedürfnisse anmelden, ohne Gegenleistung geht auch im allgemeinen Leben nicht. Verständlich, dass die EU hier einfach mal hart bleibt. Wohlverstanden, ich bin ein Schweizer und beachte die Interessen des Heimatlandes schon. Aber dazu gehört halt auch das Verstehen der "Gegenseite".
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  • Joachim Kautz, Reutlingen, Deutschland
    Joachim Kautz, Reutlingen, Deutschland at 19.09.2019
    Das bilaterale Abkommen mit der EU hat die Schweiz unter anderem zu mehr Wohlstand geführt. Laut der Handelszeitung (CH) vom Mai 2019 belegt dies ein Studie der Bertelsmann-Stiftung. Die Schweiz profitiert auch vom Zuzug grenznaher Fachkräfte. Würden alle ausländischen Fachkräfte in in ihre Heimatländer zurückkehren, hätte dies enorme negative Auswirkungen auf die Infrastruktur der Schweiz. Insbesondere Ärzte, Pflegekräfte und Facharbeiter aus Deutschland sind in die Schweiz gekommen, die dadurch im Heimatland grosse Lücken hinterlassen haben.
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    • Markus Immer, Philippinen, Cebu
      Markus Immer, Philippinen, Cebu at 19.09.2019
      Um bilateral miteinander zu "geschäften" braucht es keinen Anbindungs- sprich Unterwerfungsvertrag mit der EU! Kaum jemand kennt diesen "Vertrag". Dieser wird durch die Presse und die öffentlichen Institutionen weder umfassen kommuniziert noch hinterfragt. Da stinkt es gewaltig! Fachkräfte kommen in die Schweiz (wenige), die meisten sind mittellose und ungebildete Immigranten und landen im Sozialnetz. Die Rechnung geht auch anders: Wieviele ausgebildete Schweizer Fachkräfte arbeiten in Deutschland und anderen Staaten, jedoch kaum einer wird in Deutschland Harz4 beantragen ... "Bertelsmann-Stiftung"? Eine höchst undurchsichtige Institution. Solche "Studien" werden immer und natürlich von jemandem mit bestimmten Interessen bezahlt und sind daher wertlos.
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  • Markus Immer, Philippinen, Cebu
    Markus Immer, Philippinen, Cebu at 19.09.2019
    Eine klare Mehrheit will diesen Vertrag, der sonnenklar ein Anbindung- oder Unterwerfungsvertrag ist, nicht. Das Geschrei der Wirtschaft, ist rein politisch. Fakten und Zahlen, sowie Weitsicht und ganzheitliche Betrachtung des Staates Schweiz fehlen fast zu 100%. Unseren Politikern kann man nicht trauen, die "Verhandler" wollen allesamt in die EU. Der Wirtschaft zählen nur Standortvorteile. Der Verkauf der Heimat von leider immer weniger Schweizer Patrioten geht hinter den Kulissen weiter. "la suisse n'existe pas" ... stimmt... leider.
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    • Thomas Rettenmund, Wanneperveen, NL
      Thomas Rettenmund, Wanneperveen, NL at 21.09.2019
      Von "Unterwerfung, sklavischer Abhängigkeit" etc. zu sprechen ist einfach nur, sorry, dumm und einfältig.
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  • Peter Vogel, Memphis, Tennessee
    Peter Vogel, Memphis, Tennessee at 19.09.2019
    I hope that Switzerland remains a free nation. The EU "government" is more autocratic than democratic. The terrible "Brexit" deal they offered the UK is a punishment for threatening to leave the EU. These are just the middle steps towards an ever increasing authoritarian central government. Switzerland works so well despite the language differences because as much as possible government control is local, not federal. The EU is heading down the other path, and centralized control can only be maintained through threats and force.
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  • Rudi Amrein, Donegal, Ireland.
    Rudi Amrein, Donegal, Ireland. 1 day ago
    it looks like the holy roman empire has come back again, massive european companies and interests have come calling and will attack using the institutions of the European Union, if they are given access to free trade they will want to dictate terms that will give their companies an advantage, there by undermining the swiss owned and operated companies and eventually swallowing them up. keep independent and be a shining light to everyone that switzerland is welcoming to everyone, but on Swiss terms.
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