Swiss Get Juncker House Call as EU Seeks to Anchor Economic Ties

Jean-Claude Juncker

Photographer: Jasper Juinen/Bloomberg

The European Union’s attempt to streamline its complicated relationship with Switzerland may get a boost on Thursday.

European Commission President Jean-Claude Juncker is visiting Bern and, according to the Swiss government, this will provide an opportunity to assess the ongoing negotiations on an “institutional framework agreement” between the two sides.

Juncker and Swiss President Doris Leuthard in Bern, Nov. 23.

Photographer: Fabrice Coffrini/AFP via Getty Images

The Swiss rejected joining the EU a quarter of a century ago and, instead, their relations are governed by more than 100 agreements on everything from civil aviation to the free movement of people. While the relationship has flourished -- Switzerland is the EU’s No. 3 trading partner -- Brussels is keen to embed the country more deeply into its institutional machinery and is increasingly flexing its political muscles to achieve that goal.

“The EU wants to make sure there is a continuous mechanism for incorporating European law into the Swiss system and ensuring independent enforcement,” said Jacques Pelkmans, a senior fellow at the CEPS think tank in Brussels. “At the moment, it’s an autonomous process that allows an a la carte approach by the Swiss and that weakens EU enforcement. There’s a sentiment in EU circles that the Swiss have strategically been doing a lot of cherry picking.”  

To solve those issues, a supplementary framework deal has been under consideration for half a decade. Formal negotiations began in 2014, with dispute settlement among the matters still to be resolved, according to the Swiss foreign ministry.

The maneuvering between Switzerland and the EU has implications for the U.K. as it seeks to the leave the 28-nation bloc in 2019 and to retain close economic ties.

Credit: Swiss Foreign Ministry

The Swiss are typically skeptical of the EU and rejected joining the European Economic Area in a 1992 plebiscite. Relations took a turn for the worse in 2014 when voters backed an initiative placing new restrictions on immigration from the EU, whose citizens had previously been granted almost unlimited access. Still, the situation between Bern and Brussels thawed after the Swiss parliament passed a compromise bill that avoided outright quotas.

Switzerland’s newly elected Foreign Minister Ignazio Cassis is in charge of the country’s EU dossier, and the European Commission president is scheduled to be introduced to him before the two delegations -- headed by Juncker and Swiss President Doris Leuthard -- convene in the Swiss capital. A press conference is scheduled for 11:30 a.m.

A deal on the framework agreement is vital for Switzerland as the bloc has said that a resolution on so-called “horizontal issues is necessary before the EU is ready to conclude new agreements giving Switzerland access to further areas of the single market.”

On Thursday, the EU and Switzerland are also set to sign a pact linking their carbon-dioxide markets, which curb greenhouse gases blamed for global warming. The link between the EU Emissions Trading System and the Swiss cap-and-trade program will become operational next year.

The EU carbon market, the world’s biggest, covers 28 nations in the bloc as well as Norway, Iceland and Liechtenstein and linking it to the Swiss system would be the first process to cooperate with a third country in an effort to step up the fight against climate change.

On the institutional framework agreement, talks have “progressed significantly” since 2014, according to the EU. Still, the planned deal isn’t without its critics in Switzerland. The anti-immigrant Swiss People’s Party is concerned the EU’s judiciary may gain sway over Switzerland and is attempting to stymie the agreement.

Any deal that gets negotiated is likely to face scrutiny in a plebiscite in Switzerland -- and the immigration vote in 2014 showed that Swiss voters can be unpredictable.

“A referendum on an institutional framework agreement is by no means without a chance, but it depends entirely on what the EU and Switzerland have negotiated with each other,” said Thomas Schaeubli, a political risk analyst at Wellershoff & Partners Ltd. in Zurich, who highlighted that slowing net immigration would bolster support for an EU treaty. Still, “there’s quite a wait in store until it comes to a referendum.”

— With assistance by Ewa Krukowska

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