Swiss banks must have equal access to the European Union markets to guarantee Switzerland’s CHF1.3 billion pledge to help improve living standards in poorer EU states, a government spokesman has said.
Last month, Swiss President Doris Leuthard announced that Switzerland would renew its so-called ‘cohesion fundexternal link’ payment to the EU, aimed at tackling unemployment and poverty in eastern Europe. The 10-year funding package, part of Switzerland’s complex bilateral relationship with the EU, is due for renewal.
But it now appears there is a condition – the EU must first guarantee that Swiss banks continue to have equal access to financial markets as their EU competitors (financial equivalence). Negotiations between Switzerland and the EU on this subject have been ongoing for years, and have become bogged down with no real signs of an agreement being reached.
“If equivalence is not given it would discriminate against Switzerland,” André Simonazzi, spokesman for the governing Swiss Federal Council, told Swiss public television (SRF). “The Federal Council would have to deliberate [the cohesion fund] again. It would certainly not simplify the process for the cohesion billion payment."
With the EU in the midst of changing many of its financial regulations, particularly on consumer rights, Switzerland has had to amend its own rules to follow suit. The major sticking point for continued Swiss banking access is an EU insistence on every branch having a physical presence on EU soil – which also applies to independent asset managers and a variety of smaller financial players.
Swiss financial lobby groups say that the future strength of Switzerland’s financial industry will be threatened unless this deadlock can be broken. Earlier this week, Swiss Finance Minister Ueli Maurer broke ranks with the cabinet to publicly demand that Switzerland’s CHF1.3 billion cohesion payment be contingent on the banking deal being signed. EU President Jean-Claude Juncker said the matter will be looked into this month, but has made no promises about what decision may be taken.
This enraged rightwing and centre-right political parties, with politicians threatening to spark a referendum aimed at striking down any further EU payments unless banks were cleared to carry on doing business in the EU.