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Analysis
Heading for the rocks

Heading for the rocks

Troubled Swiss-EU relations

by Denis MacShane in London

Mon 19 Sep 2016

As all eyes focus on Brexit, where everything has changed for the UK but nothing has started, another proud European democracy would like to shut its doors to migrants but keep open the European Union’s doors to its goods and services – Switzerland.

Today, Jean-Claude Juncker, the European Commission president, travels to Zurich to meet the Swiss president, Johann Schneider Ammann. The latter is head of state for a few more months because the secret of Swiss democracy is to ensure that no one has much power. So the president changes every year and the seven-strong federal cabinet always has conservatives, liberals and socialists in its ranks.

The Swiss have perfected the art of permanent compromise and consensus, but so far they have been able to find neither compromise nor consensus with the EU. As in Britain, those pesky populist plebiscites keep getting in the way.

The Swiss voted against joining the European Economic Area in 1992, and in 2014 voted to limit the number of European migrants coming to live and work in Switzerland. Berne had been forced to accept free movement as part of a complex sequence of bilateral agreements that gave Switzerland access to the single market for part of its business community, if not all key financial players. In a sense it did not matter. UBS, Credit Suisse and other household Swiss business names are well established in London and other EU capitals, from where they can conduct single market business, albeit not in key financial sectors.

A populist anti-immigrant campaign featuring rhetoric not dissimilar to that of the UK Independence party culminated in a February 2014 referendum that wrote the obligation to limit free movement into the Swiss constitution. The response of Brussels and EU capitals was much as it has been to the UK vote to leave the EU: the single market and free movement are two sides of the same coin – if you want one, you have to accept the other.

Berne and Brussels have been locked in a loveless tango ever since. The Swiss proposed a scheme which would first give jobs to local Swiss citizens; only if none were available could a European national be a candidate. But every European treaty since 1950 has included a non-discrimination clause and however neat the Swiss proposal appeared, Brussels saw it as being full of holes.

Moreover, Brussels said Switzerland would have to accept the supremacy of the European Court of Justice in the event of differences between Brussels and Berne on all their bilateral agreements. This is a hard sell to a Swiss culture that prides itself on always being independent of outside control. So there is now an impasse.

There are calls to organise a new referendum to secure support for a final EU-Swiss deal, but Swiss politicians know what the result will be and are wary of accepting the EU offer. And while France and Germany have close ties with Switzerland and will avoid any dramatic confrontation, Swiss hopes of securing wider access to the EU single market are going nowhere and there will be no more bilateral deals.

While Brexit negotiations have not even begun, in Switzerland there is nothing more to negotiate. Instead, Swiss-EU relations are heading into the deep freeze – with Berne having to accept what its neighbours decide across a range of policy areas without any say or influence.

Denis MacShane is a former UK Minister of Europe, a Senior Adviser at Avisa Partners, Brussels, and a Member of the OMFIF Advisory Board. His book Brexit: How Britain Left Europe is published this week by IB Tauris.

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