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Switzerland hits back at EU criticism

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Switzerland has defended its relationship with the European Union after facing some strongly-worded criticism from EU foreign ministers, who called the current bilateral setup ''unwieldy'' and ''incoherent''.

The system of multiple treaties between the EU and Switzerland has ''clearly reached its limits,'' stated the ministers, adopting conclusions on EU relations with European Free Trade Association (EFTA) countries.

The text, agreed on Tuesday (14 December), does not make nice reading for Berne, criticising the ''incoherent application'' of existing EU agreements and new Swiss measures that are incompatible with them.

The Swiss retorted that the agreements are ''working well,'' but admitted that something needs to be done to make the relationship more coherent and consistent.

Switzerland participates in the EU's single market thanks to a series of sector-specific accords, which has suited both sides. Yet the complexity of the system has led to a range of legal and bureaucratic problems.

The EU has become increasingly dissatisfied with the arrangement in recent months and is pushing for a wide-ranging cooperation agreement to simplify the 120 individual deals.

In July, European Council President Herman Van Rompuy warned Switzerland that it must take up the EU's legal framework – the acquis communautaire – if it wants full access to the market.

Harsh words

EU foreign ministers pulled no punches in their conclusions, calling for an overhaul of the ''complex system, which is creating legal uncertainty and has become unwieldy to manage and has clearly reached its limits''.

Due to the lack of "efficient arrangements" to ensure the proper uptake of EU law in the country, the single market – which Switzerland has access to – lacks the "necessary homogeneity," they said.

The ministers expressed frustration at the incoherent implementation of EU rules in the Swiss confederation and introduction of new measures that go against them, singling out the agreement on free movement of persons.

They called on Switzerland to abandon restrictions introduced since the agreement began in 2002 – such as the requirement for individuals to provide prior notification before arriving, with an eight-day waiting period.

The Swiss replied that the measures are ''overall in conformity'' and are ''necessary to protect wages and working conditions'' in the country. Several EU member states have introduced similar measures through the directive on the posting of workers, they added.

Tax dispute

The ministers weighed in on the ongoing dispute about company tax regimes in some of Switzerland's cantons, which the EU considers as state aid incompatible with the 1972 Free Trade Agreement.

They are ''very concerned'' about the tax systems, which the Union sees as incentives to encourage domestic firms to set up shop at home and not in the member states. EU governments have repeatedly called for the abolition of these measures.

Switzerland denies that the tax regimes prevent fair competition. They have submitted ''constructive proposals'' to resolve the disagreement – but these were rejected by at least one member state, noted its foreign affairs ministry.

''Tax concessions at federal level have only a marginal effect and are only provided for structurally weak regions. Only 10% of the Swiss population live in those regions where such tax concessions can be granted. Swiss regional policy measures are not anti-competitive,'' it stated.

To improve the relationship and make progress on such areas of contention, the European Commission and the Swiss government have set up a working group to examine the options for simplifying bilateral relations. Its first report is due by the end of the year (see EURACTIV LinksDossier).

Meanwhile, Eurogroup chairman Jean-Claude Juncker has called on Switzerland to join the EU, saying in a newspaper interview that the Union is incomplete without the Alpine country.

"It remains a geo-strategic absurdity that we have this white spot on the European map," lamented the Luxembourger, who chairs the group of eurozone finance ministers, quoted by Reuters.

Positions

Background

Switzerland is surrounded on all sides by the European Union. According to the European Commission website, over 900,000 EU citizens live and work in Switzerland, and many more cross its borders or travel through the country on a regular basis.

The accession of Switzerland to the Economic Free Trade Association (EFTA) in 1960 and the signing of the Free Trade Agreement of 1972 with the European Economic Community (EEC) form the basis of its EU relations.

After Swiss voters opted to stay out of the European Economic Association (EEA) in 1992, negotiations have been purely bilateral. Two series of deals have resulted in ten treaties aligning a large portion of Swiss law with that of the EU.

The 'Bilateral I' and 'Bilateral II' agreements effectively mean that Switzerland enjoys the benefits of EU member states and EEA countries on free movement of people, goods, services and capital – but without having lost any sovereignty or decision-making power.

The country was close to crisis in its relations with the EU in February 2009 due to a referendum on opening its labour market to Bulgarian and Romanian workers. A 'no' would have suspended a number of trade agreements, but 59.6% of citizens ultimately approved.

In July 2010, the European Commission and Swiss government set up a working group to examine options for a cooperation agreement that would govern and simplify bilateral relations (see EURACTIV LinksDossier).

Timeline

Further Reading

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