Switzerland Cancels Negotiations with the EU on Partnership Treaty

On May 26, Switzerland abruptly withdrew from negotiations to expand relations with the European Union over fears of the erosion of national sovereignty. The decision was taken shortly before a June 13 national referendum on the proposed reduction of greenhouse gas emissions, which would increase energy and other prices.

The withdrawal is seen as yet another failure for the hapless European Commission President Ursula von der Leyen. Negotiations on a new agreement between the Swiss and the EU have been ongoing since 2014. Although a draft agreement had been completed in 2018, finalization of the deal remained unsuccessful because of key issues affecting Swiss sovereignty.

Under the guise of creating a “level playing field”, Brussels demanded that Switzerland adopt the EU’s free movement directive, which would give EU citizens uncontrolled access to the Swiss labor market on the same terms as within member countries. It was feared that this would lead to “wage-dumping”, and to the practice of cross-border workers being employed under foreign contracts. In addition, the Swiss would have to give up some of the laws protecting their workforce, which are not valid in EU countries.

Swiss citizens generally have better social protection and higher incomes than those in the EU, because their cost of living is higher. Under current agreements, citizens from EU countries can only reside in Switzerland if they have a job or other sources of income. While there are currently 1.4 million EU citizens living there, out of a total population of 8.5 million, only 450,000 Swiss are residents in EU countries.

Another key issue concerns legislation. Under the draft Treaty, the Swiss would have to modify their legislation to correspond to new legislation adopted by the EU. As a result, the Swiss citizens would have to give their “direct democracy” system, with gives them the right to petition for a referendum to be held on any law, provided a sufficient number of citizens opposed it. Moreover, the EU demands that the Swiss accept the judgments of the European Court, which was also considered to be an unacceptable condition.

Although many people associate Switzerland primarily with bank secrecy and taxation laws, those issues were resolved in separate agreements several years ago. The real issue today is sovereignty.

“The Swiss would want to be part of the EU economically but they don’t want to be part of the EU politically,” according to Laurent Goetschel, director of the think tank Swisspeace and professor of political science at the University of Basel. He believes the Swiss government felt the proposed treaty would be rejected by Swiss citizens in any referendum, and they therefore pulled out.

In the background is the “CO₂ Act” referendum which will take place on June 13. There is a big mobilization by both conservative Liberals and the conservative Swiss People’s Party as well as industrial stakeholders to defeat the legislation. Its defeat would be the first of its kind in Europe.