Switzerland, ally or competitor for UK on the Brexit way

8 years ago - Published in Finance, Fundamental Analysis

The UK could be a “serious competitor” to Switzerland as a low-tax business location in a post-Brexit world, Mr Mauer, the Swiss finance minister said: “That is perhaps the chance – that we have a partner in the same position, which on important issues is close to us.”

On Wednesday, UK Prime Minister Theresa May will kick off two years of formal negotiations with 27 EU governments. She still wants tariff-free, friction-less trade with Europe but prioritizes the right to impose immigration limits above all else.

Mr Maurer said: “The UK has lots of advantages and if they are used cleverly to decouple from the EU, as well as the new freedom in a good bilateral relationship, then the UK could develop very positively, I’m convinced of that.” If no favourable deal is struck, the tax rate could be dropped even lower to attract business, chancellor Philip Hammond has recently said. 

Like the UK, Switzerland is strong in financial services and higher education, noted Mr Maurer, a prominent politician with the ultra-conservative Swiss People’s party (SVP). “That is perhaps the chance — that we have a partner in the same position, which on important issues is close to us.”

Switzerland has attracted a raft of criticism lately after it introduced measures to curb the free movement of people, something Mr Maurer said the EU would be forced to address.

Despite not being fully signed up to the EU project, Switzerland enjoys perks and bilateral deals in exchange for certain arrangements, such as allowing the free movement of people. 

The minister said: “The free movement of people is an issue that the EU has to solve. They have to give countries more freedom, I believe, otherwise it could break up over this. 

On January Switzerland's economy minister Schneider-Ammann suggested negotiations with Britain could take place "in the background and in parallel with the exit discussions" with the EU.

Switzerland is a founder member of the European Free Trade Association (EFTA), created in 1960 as a counterpart to the European Economic Community, as the precursor of the European Union was known. Britain too was a founding EFTA member but left the group when it joined the EEC in 1973.