(Bloomberg) -- The European Commission granted Switzerland a stay of execution to allow it to overcome domestic opposition to a deal four years in the making and culminating in Brussels threatening to ban cross-border stock trading.
The European Union, Switzerland’s most important trading partner, ideally wants the relationship to be governed by a framework agreement that forces the Swiss to dynamically adopt changes to existing contracts ranging from air transport to farming and free movement of people. That idea clashes with Swiss notions of self-determination.
“We can’t sign a final deal until we’ve reached our goal 100 percent,” Swiss Foreign Minister Ignazio Cassis told reporters in Bern. “The plan we’ve presented today enables deepest market integration while maintaining the highest possible level of sovereignty.”
The government said on Friday it considered the outcome of the talks as broadly meeting Switzerland’s interests. But, in the light of unresolved topics, it decided not to sign the proposal and to further consult with “concerned parties”. Also, once the deal is approved by parliament it will almost certainly be subject to a popular referendum.
Brussels used the recognition of Switzerland’s stock exchange as a bargaining chip and has threatened to cut off the bourses in Zurich and Bern from EU traders from January. The Swiss announced an emergency plan last week in a bid to prevent trading volumes from falling off a cliff.
Swiss President Alain Berset said he talked to the head of the European Commission Jean-Claude Juncker on the phone today to remind him once again of the stock market equivalence’s importance. The European Commission plans to discuss the matter on Tuesday.
Today’s document is the result of “long, intense, constructive negotiations,” the European Commission said in a statement. While the Commission respects Switzerland’s wish to consult with stakeholders, it expects this process to be swift.
Under today’s proposal, changes to EU law would not be automatically adopted and still follow Swiss approval procedures, which include referendums. Disputes will be settled in a jointly appointed arbitration court, while giving the European Court of Justice a consultative role.
By proposing looser limits for EU-based tradespeople taking on jobs across the border, the government is trying to accommodate demands from labor unions keen to protect Switzerland’s high wages. The agreement has already been rejected by labor unions and by the anti-immigrant Swiss People’s Party (SVP), the country’s most popular political party.
Jean-Claude Juncker’s term as president of the European Commission expires next year, and in an interview with broadcaster RTS he urged the Swiss to conclude the deal, saying “a year from now I won’t be there any more and you’ll see.”
--With assistance from Alexander Weber.
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