Testing times for Swiss-German relations

The choice of Schröder or Stoiber makes little difference to the Swiss (Keystone) Keystone

Switzerland's relationship with neighbouring Germany has been put to the test in recent years, amid wrangles over banking secrecy and a controversial aviation agreement.

Experts hold out little hope of a thaw, even with a possible change of government in the country’s general election on Sunday.

The two sides have been locked in a long-running dispute over an air transport accord aimed at reducing noise pollution from Switzerland’s main airport of Zurich, which lies less than 20 kilometres from the border with Germany.

Germany is Switzerland’s most important commercial partner, with trade between the two countries worth SFr71.2 billion ($47 billion) in 2001. Exports to Germany far outweigh those to the United States.

Disputes

The German transport minister, Kurt Bodewig, recently threatened to impose strict measures, if Switzerland refuses to ratify the agreement struck by the transport ministers of both countries last October.

Meanwhile, Switzerland has been angered by Germany’s stance over the issue of the taxation of European Union residents’ savings, which threatens Swiss banking secrecy regulations.

The German finance minister, Hans Eichel, is strongly in favour of an EU directive calling for the exchange of information on the interest paid to EU residents in Switzerland – a move which would effectively compromise Swiss “customer confidentiality” rules.

Switzerland opposes the plans and has proposed levying a withholding tax on savings income and sending the money to Brussels.

Planning ahead

In both disputes – aviation and banking – Swiss politicians have actively sought to capitalise on the possibility of a change of government in Germany on September 22.

They have delayed the next air transport meeting until the end of October, by which time the ruling government for the next four years will be in place.

Bern is hopeful that, even if the current administration holds onto power, some ministerial posts might change, including that of transport.

Similarly, Switzerland has been encouraged by comments made by members of the German opposition, signalling a softening of Germany’s stance toward Swiss banking secrecy.

Sceptic

However, some experts have viewed the proposals with scepticism.

“It’s unrealistic to think that Germany can derail the EU agenda,” Thomas Straubhaar, the president of the Hamburg-based economic institute, HWWA, told swissinfo.

Britain, Austria and Luxembourg are also opposed to the EU directive, he explains, but the majority of other EU states support it.

“Both potential chancellors will, in the first place, have to look after German and European interests,” he continues, adding that the issue had, in any case, far more to do with Brussels than Berlin.

Meanwhile, Thomas Sutter, spokesman for the Swiss Banking Association, also holds out little hope of sea change in Germany’s policy.

“Whatever politicians say during an election campaign should be regarded as political rhetoric,” he says.

swissinfo, Hansjörg Bolliger translated by Vanessa Mock

Key facts

Germany is Switzerland’s most important trading partner (2001: SFr71.2 billion)
Exports to the German state of Baden-Württemberg (2001: SFr20.7 billion) are almost as important as overall exports to US (2001: SFr20.9 billion)