Swiss Review 2/2018

15 Swiss Review / March 2018 / No.2 It actually seemed as though this time the development aid for poorer EU countries would be agreed without domes- tic political squabbling. In 2006, the first billion Swiss francs in cohesion contributions had to be approved by the Swiss people because the SVP contested its legal basis through a referendum. This time, the SVP has allowed the deadline for calling a referendum against the renewal of the Federal Act on Assistance to Eastern Europe to expire without calling a vote. However, the SVP is regretting its de- cision now as there is once again widespread discontent- ment over this in Swiss politics. Switzerland on the grey list The reason this time is the threatening behaviour from Brussels that the EU is using to bring Switzerland to heel on other affairs. Shortly after the Federal Council made its pledge, it was revealed that the EU had placed Switzerland on a grey list of countries whose tax regimes are not com- pliant with its own in the EU’s view. The EU is still opposed to the tax privileges that Switzerland grants to foreignhold- ing companies. As the Corporate Tax Reform III was de- feated at referendum, the EU’s demands have still not been implemented in Switzerland. However, the real bombshell arrived just before Christ- mas when the EU announced that it would only recognise the Swiss stock exchange for a year. Brussels is using this time limit to apply pressure on Switzerland to conclude an institutional framework agreement on the bilateral trea- ties in the first half of the year. This should regulate the in- corporation of EU lawand the arbitration procedure in the event of disputes. But in Switzerland, the conservative par- ties, particularly the SVP, are finding it difficult to see such a framework agreement as a “treaty of friendship”, which is what Juncker labelled it. Christoph Blocher, the domi- nant figure in the SVP, has even claimed that the fight against this agreement is just as important as the one against the European Economic Area (EEA) Agreement. Blocher argues that 25 years after the Swiss people rejected the EEA Agreement the Federal Council is attempting to make Switzerland subordinate to the EU through a “colo- nial treaty”. The SVP has therefore already submitted a “self-determination initiative” which aims to enshrine the principle that Swiss constitutional law takes precedence over non-binding international law – such as the bilateral agreements with the EU – in the Swiss Constitution. The Federal Council saw the one-year limitation of stock market recognition as an affront. It was completely incon- sistent with the positive front put on matters by Doris Leuthard, then President of the Swiss Confederation, and Juncker at the reception last November. Several weeks later, Leuthard claimed Switzerland was being discriminated against by the EU. The USA, Australia and Singapore, with which the EU has far less close relations, had received un- limited recognition of stock market equivalence from the EU. This year’s Swiss President AlainBerset also condemned Brussels’ conduct towards Switzerland. Without stock market recognition, Switzerland faces losing a significant share of securities trading on exchanges in the EU. The conservative parties are therefore calling upon the Federal Council to use the cohesion payment as a bargaining chip until the equivalence of the Swiss stock ex- change has been permanently guaranteed. EEA states pay more Even if the Federal Council decides that Switzerland can- not avoid continuing tomake cohesion payments, the EU’s attempts to exert pressure have changed the mood in Par- liament. The conservative parties will not want to approve the new credit unconditionally in light of the EU’s power play. Whether Parliament ultimately dares to engage in a test of strengthwith the EU is another question. The EUde- mands even higher cohesion contributions from other countries, namely the EEA members Norway, Iceland and Liechtenstein. The three EEA states paid around €1.8 bil- lion in total towards cohesionwithin the EUbetween 2004 and 2009. The EUwill now receive further support of €2.8 billion for the period from 2014 to 2021. Norway will con- tribute the lion’s share, paying 97%. The EU will continue to insist on the rapid conclusion of a framework agreement because it aims to ensure a uni- formapplication of the law in treaties that provide Switzer- landwith access to the singlemarket. The newForeignMin- ister Ignazio Cassis must therefore primarily focus on policy on Europe during his first year in office. Before his election, the FDP Federal Councillor proposed a reset in ne- gotiations with the EU. The SVP understands something different by this from the parties to its left. It is opposed to any institutional binding of Switzerland to the EU. The other parties see the need for orderly relations with the EU and favour a court of arbitration that decides in the event of a dispute over legal interpretation between Switzerland and the EU. The EU has also indicated that it is open to such a solution and a way out of the institutional deadlock finally seems pos- sible. MARKUS BROTSCHI IS THE FEDERAL POLITICAL AFFAIRS EDITOR FOR THE “TAGES-ANZEIGER” AND “BUND” NEWSPAPERS.