Swiss Review 6/2018

Swiss Review / November 2018 / No.6 14 Politics ple of such ameasure is the so-called eight-day rule, which requires foreign companies that want to send employees to Switzerland for brief assignments to give eight days’ no- tice. In the years to come, the EU will increasingly insist on resolving institutional issues. In 2012, the EU made it known to Switzerland that there won’t be any new bilat- eral accords without a framework agreement. The negoti- ations started inMay 2014. At the end of 2017, the EU lost its patience for the first time. It punished Switzerland for its hesitation by only recognising Swiss stock market regula- tions for one year andmade an extension dependent on the progress of the framework agreement. This galvanised Bern, where there are growing fears of additional, economically damaging blows. What does the framework agreement regulate? Essentially, there are two aspects: the dynamic adoption of legislation and the settlement of disputes. The current bilateral agreements, with the exception of the Schengen/Dublin agreement, are static in nature. How- ever, EU law is constantly evolving. Switzerland already reg- ularly adapts its national law to match new EU laws, espe- cially where it deems it necessary to ensure unhindered access for the economy to the EU Single Market, as in the case of stock exchange regulations. But the new approach will be an institutionalised, dynamic adoptionof legislation. Nowadays, Bern and Brussels are able to discuss their differences in the Joint Committee, a politico-diplomatic body. In the event that opinion is divided, there is no legal way of achieving an agreement. From a political point of view, each side is at liberty to take retaliatory measures to exert pressure on the other side, which represents a prin- ciple of “might makes right”. In future, there will be a juris- diction for the settlement of disputes. During the negotiations conducted to date, it has been agreed – at the insistence of Switzerland – that the frame- work agreement should only apply to five of the 120 or so bi- lateral agreements. Namely for those that regulate the econ- omy’s access to the EU Single Market. These are the agreements on the freemovement of persons, technical bar- riers to trade, air and land transport as well as agriculture. Future agreements onmarket access shall be coveredby the framework agreement. One example is the electricity mar- ket agreement that Switzerland would like to conclude. How does the dynamic adoption of legislation work? In principle, Switzerland would commit to always adopt- ing new EU Single Market laws instead of adopting these independently on a case-by-case basis. In return, Switzer- landwould be given a say in the further development of EU law and a sufficient period of time during which it could adapt national law in accordance with its principles of di- rect democracy. Thus, Swiss voters would still have the fi- nal say. If they reject the adoption of new EU law in a spe- cific case, the EU could indeed take retaliatory measures. But unlike today, the framework agreement would ensure that these would be proportionate. How will disputes be settled in the future? In its 2013 negotiating mandate, the Federal Council stip- ulated that disputes should be resolved by the European Court of Justice (ECJ). However, this met with increasing resistance on the domestic front. Eventually the EUoffered Switzerland the option of negotiating a new arbitration solution instead of an ECJ solution. This defused the debate about “foreign judges”, especially since the arbitral tribu- nal would consist of a judge appointed by Switzerland and a judge appointed by the EU, as well as a jointly appointed president. Nevertheless, this solution will not change the fact that the European Court of Justice remains the deci- sive authority for the interpretation of EU law. Which decisive issues remain? Questions regarding the so-called EU Citizens Directive have yet to be resolved. So far, Switzerland has refused to adopt it, since it would have consequences regarding fam- ily reunification, access to social welfare and the expulsion of EU citizens. Meanwhile, a consensus on the regulation of state aid seems to be within reach. In addition to subsi- dies, this also includes tax relief and state investments in companies, which are particularly widespread in the can- tons. By contrast, such subsidies are frowned upon in the EU in as far as they distort cross-border competition. How- ever, the accompanyingmeasures remain themost difficult issue. If the positions of Bern and Brussels do not become more closely aligned, all other negotiation successeswould become irrelevant. After all, what always applies during ne- gotiations also applies in this case: “Nothing is agreed, un- til everything is agreed”. HEIDI GMÜR IS THE PARLIAMENTARY AFFAIRS CORRESPONDENT FOR THE “NEUE ZÜRCHER ZEITUNG” NZZ