Wednesday, 9 February 2011

Switzerland buries its head in the sand

Switzerland's foreign minister was in Brussels yesterday for some awkward discussions with EU leaders, and despite the beaming smiles following her meetings it was clear that by this point Brussels and Bern are operating on two different wavelengths.

The visit was arranged following a serious souring in relations between Switzerland and the EU after a resolution from EU foreign ministers in December warned that the relationship between the two had become incoherent and unwieldy. While Switzerland is not a member of the EU, it is a sort of "pseudo-member" and is allowed to participate in the EU single market thanks to a series of bilateral agreements. These 120 agreements were negotiated in two rounds in 1999 and 2004. In exchange for allowing Switzerland the benefits of access to the common market, the EU expects certain things in return - such as the right for any EU citizen to live and work in Switzerland (and vice versa). But in return, the EU position is that if Switzerland violates any of these accords, all 120 of them will be torn up.

So far this arrangement has suited the Swiss just fine - probably because most Swiss citizens are unaware of the extent of the accords and think their country remains completely independent and separate from the EU. But Brussels has grown frustrated with the unwieldy and complicated arrangement, and now they are saying Switzerland needs to move over to a more defined relationship as exists in the other pseudo-EU countries - Norway, Iceland and Liechtenstein.

Those three countries are in the European Economic Area, a defined bloc of countries that have to follow certain areas of EU law (about 80%) but not others. Essentially the EEA countries are the rump of what was left of the European Free Trade Association (EFTA) after the rest of its members fully joined the EU. EFTA was originally created in 1960 as a sort of "EU light" training ground for countries possibly headed for eventual membership. Most recently these have included Austria, Finland and Sweden.

In 1992 the Swiss government formally applied for EU membership. But later that year, they held a constitutionally-mandated referendum on whether Switzerland should join the EEA. The Swiss voted no by just 50.3%. Many Swiss voted no at the time because they saw the EEA as something that would tie them to eventual full EU membership.

But once Austria became an EU member state in 1995, Switzerland became completely surrounded by the EU. At this point both Brussels and Bern realised they had to do something to give Switzerland access to the common market or Switzerland would be cut off from its neighbors. After all, not only is the EU Switzerland's biggest trading partner (obviously), but also Switzerland is the EU's second biggest trading partner after the US - bigger than even China or India.

Because joining the EEA would require another referendum which was likely to fail, the Swiss government instead created an almost identical arrangement to the EEA through bilateral accords. These did not require a referendum. In other words, EEA membership through the back door.

But the bilateral accords are not as simple or defined as the EEA, nor are they complete. A third round of bilateral accords is needed for Switzerland to have full access to the EU market, and this is what the Swiss foreign minister, Micheline Calmy-Rey, was in town to ask for yesterday. But Brussels is in no mood to even entertain the notion. Not only do they not want to award Switzerland with another set of bilaterals, the current thinking in Brussels is that the first two bilaterals were a mistake in the first place. Calmy-Rey acknowledged as much when she told journalists after her meetings that even the word "bilaterals" is not something Brussels likes to hear right now. And for their part, the EU leaders she met with stressed that before Brussels can open any new talks with Bern, the "institutional issues" must be solved.

The problem is that no politician in Switzerland is politically willing to solve them, though they are surely aware of the problem. This is an election year in Switzerland, and every political party - from the left to the right - says they would oppose any change to the status quo with the bilateral accords. And yet, they say a third round of accords is needed to give Switzerland greater access to the EU market.

Swiss politicians may be in the mood to be more realistic after the election in October. But for the moment none of them wants to even talk about the EU - because they might get roped into telling the Swiss public an uncomfortable truth they don't want to hear: Switzerland needs the EU and they depend on the bilateral accords, but if Brussels says the arrangement is no longer working, the Swiss can't just put their hands over their ears and pretend they can't hear them.

So what exactly does Brussels want? Well it might seem sensible for Switzerland to just join the EEA. After all, that body is clearly no longer a 'path to EU' bloc but has instead evolved into an 'EU light' bloc roughly equivalent to the relationship Switzerland has now. In fact eventual EEA membership is now being proposed for Turkey and Ukraine by those who are firmly opposed to either's membership in the union. In other words, the EEA will likely become a permanent non-EU body specifically designed for countries neighboring the EU who either don't want or aren't given full membership.

But of course EEA membership would require a referendum, and since the majority of Swiss labor under the delusion that they're getting along just fine with no connection whatsoever to the EU, they are likely to vote against it. Brussels is sensitive to this problem, so they are merely proposing to Switzerland a separate EEA arrangement that would work the same way - where EU regulations would automatically be applied in Switzerland and there would be legal certainty. That, they say, is the only context in which discussions about future agreements can go forward. They do not want to hear any more talk of "bilaterals". They want the entire institution of the relationship to be redone if Switzerland is going to get the changes it needs. But at the same time, they are not demanding that Switzerland join the EEA.

Of course in the end, neither the EEA nor the bilateral accords are great arrangements for either side. For the EEA countries and Switzerland, they are bound to follow most EU legislation and yet have no say in the creation of that legislation. They are being governed in certain areas by the EU but have no representation on the EU governing bodies. They are able to maintain a veneer of absolute independence and sovereignty, but in reality they have actually voluntarily given up their right to have a say in the creation of their own laws.

On the other hand the relationship is not good for the EU either. Perhaps the biggest problem is that it gives the public, both within Switzerland/EEA and outside, a misleading impression. In Eurosceptic Britain, I often hear the argument that the UK should secede from the EU because, "look at Switzerland, they're not in the EU and they're doing great." By allowing Switzerland to enjoy the benefits of the common market while at the same time allowing Swiss citizens (and EU citizens) to believe that the Swiss are not actually in that market does huge damage to 'brand EU'.

Switzerland now sits as a giant hole in the middle of the union both geographically and ideologically. It's always there for Eurosceptics to point to as an example of why the EU is useless and countries would be better off without it. The idea is nonsense, but who has the time to sit through an explanation of these complicated bilateral accords?

Apparently you do if you've made it to the end of this blog entry!

1 comment:

Anonymous said...

In Switzerland they call a referendum for everything. It's why the country is so frozen in its conservative ways. Everyone thinks it works so well, but government there moves so slow and is so unresponsive. it's a house of cards. when a big crisis strikes, the country will fall apart.