Monday, 10 February 2014

Switzerland's misleading model

The EU helps Eurosceptics when it allows Switzerland to be in the single market while pretending to be outside of it.

Last week, when Dutch Eurosceptic politician Geert Wilders unveiled a much-anticipated 'nexit study' (Netherlands exit from the EU), Switzerland featured prominently in the press conference.

The wealthy Alpine nation, about the same size as the Netherlands geographically, was held out as the paradise which would await a country if it leaves the EU.  Mark Pragnel, an analyst at British firm Capital Economics, which conducted the study, said Switzerland’s bilateral system of treaties with the EU is a model that the Dutch should emulate. “We think the Swiss option is viable for the Netherlands,” he said.

The argument is not new. Switzerland often features prominently in British debates about leaving the union. Not being in the EU hasn’t harmed economically thriving Switzerland, so why would it harm the UK? In fact, Switzerland’s success is often held out as being the result of, rather than in spite of, the country not being subject to EU law.

But this narrative is false. Switzerland is in fact part of the EU’s single market and it has to follow most EU law. Like the European Economic Area (EEA) countries Norway, Iceland and Liechtenstein, Switzerland exists in a ‘fax democracy’. Its ten bilateral treaties with Brussels, which mirror EEA membership in all but name, bind the country to follow EU law in agriculture, transport, trade, public procurement, environment, free movement and border control.

It is in this context that Swiss voters went to the polls yesterday (9 February) and voted in a referendum to set caps on immigration from EU countries. Such a law, which must now be adopted by the confederal government in Bern, would directly violate the country’s treaty on free movement with the EU, signed in 2002.

The result will no doubt be cheered by Eurosceptics as they point to Switzerland as an example of the freedom that comes from being outside the EU. One can imagine that a migration referendum held anywhere in Europe right now would have similar results as yesterday’s vote in Switzerland. The difference is that EU member states can’t restrict EU migration. But can Switzerland?

The answer is not so clear. Yes, Switzerland is not in the EU. But it’s treaty on free movement with the EU obliges it to follow the same policy as an EU member state. Unlike with a member state, the Commission cannot take Switzerland to the European Court of Justice for infringement of this principle. But it can use the “guillotine clause” of its treaties with Switzerland, which says all ten bilateral treaties can be torn up if Switzerland violates just one.

Surely, the economic consequences of using the guillotine would be far worse than whatever fine would be imposed on a member state after years of an infringement process. Switzerland needs access to the EU market, and it relies on the bilateral treaty system to give it that access.

In 2009, when Swiss voters held a referendum on whether to give Bulgarians and Romanians the same free movement rights as other EU citizens, they were warned that a failure to approve the measure would mean an automatic invocation of the guillotine clause.

“In case of a no, the first parcel of bilaterals will be automatically cancelled," said Michael Reiterer, the EU’s ambassador to Switzerland, in an interview with the Geneva Tribune. "The guillotine clause will be automatically applied.”

That threat seemed to work, and Swiss voters begrudgingly allowed the Bulgarians and Romanians in in 2009. This year, however, things went differently. Does the threat still stand? So far the answer has been unclear, and the European Commission says it will wait for Bern to actually adopt a law implementing what the referendum calls for. This could take as long as three years.

But there is a compelling reason for Brussels to make its intentions clear earlier, particularly in the context of the upcoming European Parliament elections. What would happen to Switzerland if its set of bilateral treaties with the EU were torn up tomorrow? All Swiss citizens working in the EU would have to return home. Swiss manufacturers would suddenly no longer have access to the EU market. Confidence in the country’s economy would likely take a massive hit.

It is unlikely that the EU will choose to treat their neighbour so ruthlessly. But the message needs to be conveyed that Switzerland needs the EU, to counter the ever-growing narrative that Switzerland’s case shows that it is perfectly feasible to have a prosperous future outside the union. There is a case to be made for the EU to call that bluff, to threaten to cut Switzerland loose and let people see the effects of being really separate from the union, not just in name but in reality.

The European Council has already made it clear that it wants to “reset” relations with Switzerland and to consolidate the country’s 210 trade treaties into a normalised framework – preferably by Switzerland simply joining the EEA. In December 2012 EU leaders announced there will be no further treaties with Bern until such a framework is agreed.

But Switzerland’s leaders have been slow to respond, and without prodding, why should they? The government knows it faces an electorate which is hostile to the EU, and the current arrangement where Switzerland pretends to be completely outside the union works well politically.

The EU’s foreign affairs ministers meeting in Brussels today have a choice to make. They can make a tepid response to Switzerland’s referendum and simply quietly continue the current negotiations toward a more cohesive framework. Or they can make a real, credible threat to completely cut Switzerland off, which is their right to do under the safeguard clause.

The latter choice might seem brutal, but it would demonstrate to all people in Europe, not just the Swiss, what a future without the EU really means.

If the Swiss don’t want to be part of the union, nobody can force them. But they should at least be made to live with the real consequences of not being part of Europe’s common market. As long as they are allowed to exist in an illusory independence, afforded the benefits of EU membership while still thinking of themselves as outside, the country will continue to be used by Eurosceptics as an example to follow.

1 comment:

hopy said...

Switzerland is not in the EU., But there is a treaty on free movement for EU to force it to follow the same policy as an EU member state. Unlike a Member State, the Commission does not Switzerland can get the European Court of Justice for violating this rule., but it can use the "guillotine clause" of treaties with Switzerland, which stated that all ten bilateral agreements can be torn apart if Switzerland is only a violation. "I do not understand about this problem, why many countries just do like this, just because I want all of autonomy and independence, .....