Brexit negotiations influences Swiss treaty with EU

7 years ago - Published in Finance, Fundamental Analysis

Talks about a new treaty governing the European Union’s relationship with Switzerland have collapsed over the same issue bedevilling Brexit — the European Court of Justice.

Switzerland, which is not a member of the EU, has more than 100 bilateral agreements with Brussels overseeing ties including transport, trade and education, but the EU is demanding a single framework treaty.

A new treaty could clear the way for closer ties in fields including financial services and power markets, but fear that any deal might upset Swiss voters under the country's system of direct democracy has put the project on hold.

Switzerland’s relationship with the EU has been seen as one model for Britain because it has market access for goods under a free trade agreement and several other cross-border agreements. In return Switzerland has signed up to the free movement of EU citizens and is a member of the Schengen area.

Swiss voters rejected the same EU relationship as Norway, however, which would have meant the automatic acceptance of EU laws.
The eurosceptic Swiss People's Party (SVP), the country's largest, has opposed any treaty that lets the European Court of Justice (ECJ) settle disputes.

Christian Democrats (CVP) leader Gerhard Pfister said the EU had seemed very keen to conclude treaty negotiations quickly so it can return its attention to Brexit talks. “We will wait and see how the Brexit negotiations go and then perhaps adopt a position similar to the UK,” he said.

Mr Pfister said Swiss President Doris Leuthard and President Juncker both agreed the prospects of a deal being reached by the end of this year were slim. 

But, yesterday, a European Commission spokeswoman said: "We are making good progress since the meeting between President Juncker and President Leuthard in April and are confident that if efforts continue from both sides in that sense, the agreed timetable can be met."

Privately, officials in Brussels said commission negotiators were digging in on the issue of the ECJ because of Brexit. Michel Barnier, the EU’s chief negotiator for Brexit, has been instructed to maintain oversight of the ECJ for the rights of EU citizens in Britain.