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Aid package wins approval but faces new battle

Parliament voted to grant more money for eastern Europe Keystone

Parliament has approved a ten-year extension of Switzerland's payments to countries in eastern Europe and the former Soviet Union.

This content was published on March 20, 2006 - 22:50

But several rightwing parties have threatened to challenge the agreement to a nationwide vote.

The Senate on Monday followed the House of Representatives in adopting an extension of a programme introduced in the 1990s. It is aimed at helping eastern European countries transform into market economies following the collapse of the Communist regimes.

Switzerland has spent more than SFr3 billion ($2.7 billion) in aid to the region.

The new law on cooperation with eastern Europe also provides the legal basis for the payment of a SFr1 billion contribution to the ten new European Union member states.

It does not specify how the money for the so-called Cohesion Fund is to be raised.

Concerns

Several senators criticised the foreign ministry on Monday for failing to provide a clear finance policy for the fund.

There are also concerns that the regular development aid is to be curtailed to make up for the extra spending.

In February the government and the EU signed a memorandum of understanding on Swiss payments to the ten new member states. It is part of a deal to grant Switzerland access to the EU's enlarged internal markets and the second set of bilateral treaties concluded in 2004.

The government also pledged to submit the funding details to parliament by the end of this year.

Referendum

However, the Lega dei Ticinesi group has announced it will challenge the SFr1 billion payment to a nationwide vote.

The group looks set to receive the backing of the far-right Swiss Democrats and the leading rightwing Swiss People's Party.

They need to collect at least 50,000 signatures over the next three months to force a vote likely to take place next year ahead of parliamentary elections.

The same groups, known for their anti- EU stance, also forced a ballot on extending a labour accord with the EU to the ten member states, mainly in eastern Europe.

But Swiss voters in September 2005 approved the extension with a 56 per cent majority.

swissinfo with agencies

In brief

Switzerland has been granting financial aid to countries in eastern Europe to help them transform into market economies.

As part of the second set of bilateral treaties with Brussels, non-EU member Switzerland, pledged to provide SFr1 billion to ten new EU member states mainly in eastern Europe.

Most of those funds are to go towards Poland, Hungary and the Czech Republic.

Rightwing parties in Switzerland, known for the anti-EU stance, have announced that they will challenge the SFr1 billion payment, saying the government is giving in to pressure from Brussels.

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