Switzerland approved $1.3 bn aid for EU

7 years ago - Published in Finance, Fundamental Analysis

Switzerland said Thursday it will provide more than a billion dollars in development aid to the European Union, as Bern seeks to stabilise its messy ties with Brussels.

The 1.3 billion Swiss francs ($1.32 billion, 1.1 billion euros) will be spread over ten years and will target lower income countries in central and eastern Europe, a statement said. The funds are "intended to reduce economic and social disparities in Europe, which is in Switzerland's economic and political interest", it said.

The news was announced by Swiss President Doris Leuthard during a visit to Bern by European Commission President Jean-Claude Juncker.

"Switzerland shows it is a reliable partner," Juncker said at a press conference. Accused by a journalist that he has come to Switzerland to "ask for a check," the EC President assured: I am not in Bern to receive a gift. The decisions of the Federal Council (the government) are independent. Switzerland made a similar contribution to the EU over the previous decade and the extension of the programme must still be approved by parliament.

Switzerland's complex ties with the EU are sewn together through a mixture of deals on trade, labour, migration and other issues. The Bern-Brussels relationship suffered a heavy blow in 2014 when Swiss voters backed a proposal calling for the re-introduction of migrant quotas, which could have limited the number of EU citizens working in Switzerland.

The Swiss parliament last year approved a modified version of the plan to pacify the EU. Some Swiss politicians continue to call for an updated, simpler set of agreements governing EU ties.

Switzerland is not a member of the EU, but it has more than 120 bilateral agreements with Brussels and needed to update existing accords and forge some new deals. Since 2008, Switzerland has contributed to the bloc's "Cohesion Fund" aimed at reducing economic and social disparities within the EU and which was renewed on Thursday.
Switzerland is the EU's third biggest trading partner and the ten-year program was up for renewal. About 1.1 billion Swiss francs are aimed at vocational training programs and efforts to combat youth unemployment in EU member states in central and eastern Europe over the next ten years.