Why the EU’s flexible integration system is likely to meet Switzerland’s special demands

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On May 26, Switzerland withdrew from negotiations on a new partnership with the European Union. Stefan Gänzle, Tobias Hofelich and Uwe Wunderlich Write that while the rhetoric on both sides is likely to become more heated in the coming months, there is still plenty of room for compromise.

When Switzerland withdrew from negotiations on a new partnership treaty with the European Union on May 26, many observers felt a sense of déjà vu. Shortly after the UK became the first country to leave the club, another appeared to be heading for a looser relationship.

But what exactly happened? Since 2014, the EU has attempted to conclude a framework treaty with Switzerland, attempting to streamline the current patchwork of more than 120 bilateral agreements that bind the Alpine Republic to the Single Market and the EU. The central idea behind the framework treaty is not only the desire to reduce the administrative burden that accompanies the regular updating of bilateral treaties, but also to ensure that the Swiss authorities would automatically adopt the relevant legislation of the EU – similar to the EEA (European Economic Area) of which Norway, Iceland and Liechtenstein are part. However, the Swiss government opposes three key aspects of the proposal: the rules on state aid, the ability of EU citizens to access the Swiss social protection system and the protection of higher Swiss wages.

The Swiss arguments for withdrawing from negotiations seem all too familiar after more than a decade of growing Euroscepticism across Europe. The danger of further disintegration, following Brexit, seems to be significant with terms like Grexit or Frexit, and now “Swexit”, continuing to float. Of course, there are differences between Brexit and a potential ‘Swexit’. Switzerland is not a member of the EU. Nevertheless, he maintains close relations and is strongly integrated into the bloc. This status quo is now under threat as many existing treaties will eventually become obsolete, and they also do not cover all updates and changes to the Single Market. The EU indicating that it will not renew or update any of the existing agreements, progressive decay by default seems to be on the cards.

Default disintegration

The EU can be seen as a system of differentiated integration which consists of several concentric circles around a core of the most deeply integrated states, such as the members of the euro area. Further away, but still within the EU, are the states which benefit from a number of exemptions in policy areas such as Economic and Monetary Union, followed by the aforementioned EEA states which do not. part of the EU, third countries with bilateral and association agreements. and candidates for future membership.

As Brexit has illustrated, moving from an inner circle to an outer circle is just as possible as the reverse process, closer integration. This does not imply a complete severing of ties but rather a redefinition of relationships and priorities. Post-Brexit Britain, for example, remains linked to the EU in various ways. Likewise, Switzerland could opt for a more flexible relationship with the bloc in the future. One possible scenario, given the current state of affairs, would be a piecemeal reduction in integration levels to something similar to the new British model, ensuring at least some form of free trade with the EU. After all, Switzerland is the EU’s fourth largest trading partner and almost all Swiss exports go to the EU.

However, due to Switzerland’s central location, economic and political ties with the EU are much closer than those with the UK. Around 1.4 million EU citizens have taken up residence in Switzerland while 400,000 Swiss citizens live in the EU. Hundreds of thousands of people cross the border daily to get to work. This interdependence is generally regarded as a major driver of regional integration, and it is essential to answer the second question of whether default decay is likely to occur.

The advantages of compromise

Both sides have a lot to lose. The consequences will become evident very soon because a bilateral agreement, on the mutual recognition of medical technology, has already expired. However, as Brexit has shown, disintegration is driven by much more than economic rationalities or general interdependencies. Over the coming weeks and months, the two sides are expected to arm themselves to strengthen their bargaining power.

In this regard, the chairman of the European Parliament delegation to Switzerland, Andreas Schwab, expressed his disappointment at the Swiss government’s decision and hinted that the EU was hardly interested in renewing and updating the bilateral treaties dating back to the 1990s. his words, “Everyone here understands that these times will not return. From now on, only Switzerland should understand this. The EU is apparently ready to wait for the Swiss government to return to the negotiating table. Alas, such an attitude will give way to harsh rhetoric, thereby strengthening and widening the rift between the two sides, making disintegration even more likely.

It is interesting to note that the disintegration option enjoys very little popular support in Switzerland. Many opinion polls suggest that 64 percent of the population support the new draft treaty. This is an important difference from Brexit, which resulted from a popular referendum, when the Swiss decision was dictated by the government. Thus, the Swiss government could consider recalibrating popular demand and assessing the prospect of a deterioration in bilateral relations with the EU and its own political calculations.

The EU, for its part, would be wrong not to try to reach a compromise. After all, Switzerland is not looking to exit the EU, but simply to maintain the status quo. The EU has often shown remarkable resilience and capacity for compromise. It is this unique characteristic which paved the way for European integration and ensured peaceful relations between its members. Bullying Switzerland into returning to the negotiating table could undermine popular support for the EU and reinforce Euroscepticism within the current Swiss government.


Note: This article gives the point of view of the authors, not the position of EUROPP – European Politics and Policy or the London School of Economics. Featured Image Credit: European Council




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