Cracks emerge in “special relationship”

Former Swiss ambassador to Germany, Thomas Borer-Fielding Keystone Archive

A row over a tax on re-exports with the European Union and border chaos with Germany will top the agenda when the Swiss president, Joseph Deiss, travels to Berlin in April.

Switzerland’s former ambassador to Germany told swissinfo that relations between the two countries have changed dramatically in recent years.

According to Thomas Borer-Fielding, Germany has traditionally defended Switzerland’s interests in Brussels. But he says Berlin is no longer prepared to look out for its small neighbour, which insists on staying out of the EU.

Germany’s political and economic priorities now lie squarely with other EU countries, compromising the special relationship that previously existed between Bern and Berlin, says Borer-Fielding.

That could make it tough for Deiss to win support from Germany when he meets Chancellor Gerhard Schröder next month to discuss EU plans to levy a tax on re-exports from Switzerland (see “EU grants Switzerland breathing space”).

swissinfo: Are issues such as the re-export tax and increased checks at the border more a Swiss-EU problem or a Swiss-German one?

Thomas Borer-Fielding: Both. We have a lot of problems with Germany and, of course, a fair number with the EU too.

Until about two years ago, Germany was always one of Switzerland’s strongest supporters in Brussels. But now I would say that it’s more likely to take the EU’s side in disputes.

swissinfo: Why has that changed? Does that mean Germany’s main commitment now is to the EU?

T.B-F.: There are many reasons why it has changed. Of course, there has been a political shift in Germany since the Social Democrat-Green government came into power.

Generally speaking, their power base is in the north and the east of Germany. They don’t know Switzerland very well and I don’t think they like our political system very much.

Another reason is that the EU is about to increase in size and Germany’s attention has been focused on enlargement rather than the special needs that Switzerland might have.

The third reason is the dramatic financial problems of both Germany and the EU. They have to save money wherever they can and find new sources of income. Of course, Switzerland is always an easy target.

swissinfo: The EU’s plans to introduce a re-export tax came out of the blue. Is it a case of Brussels trying to put pressure on Bern to sign an agreement on a withholding tax on EU residents’ savings income held in Switzerland.

T.B-F.: Either the bureaucrats in Brussels are stupid or they have clear intentions. I think they are smart people and their goal is obviously to put pressure on Switzerland.

But in my opinion this tax is illegal. There’s been a free-trade agreement in place with EU countries since 1972.

Over the past 30 years this agreement has been interpreted as meaning no tax on re-exports, and under international law that agreement can’t simply be changed overnight.

I also think it’s against World Trade Organization agreements. The bureaucrats in Brussels must have known how much impact this threat would have.

swissinfo: What about the increased border checks? What is Germany trying to achieve?

T.B-F.: Your guess is as good as mine. It doesn’t make any sense to a reasonable person.

Up until now the Germans have said they are just enforcing the Schengen agreement [the EU’s treaty on fighting cross-border crime]. But that hardly seems justifiable.

The threat of a terrorist or a criminal crossing from Switzerland to Germany is minimal. Switzerland is surrounded by Schengen countries and it’s extremely difficult for terrorists to get into the country in the first place.

swissinfo: What kind of coverage has the dispute been receiving in the German media or is it just being ignored?

T.B-F.: It has mainly been ignored. Switzerland is basically ignored. But that’s not the mistake of the German government or the German media.

That’s our mistake as our government and diplomatic service haven’t been able to get across just how much we matter.

For Germany, Switzerland is not a small country. We are economically very important. We are the third-biggest investor in Germany and we buy half as many goods from Germany as the United States does.

These points have to be made clear to journalists and to the political establishment in Germany so that they take us seriously – and there we have failed dramatically.

swissinfo-interview: Jonathan Summerton

In brief

In February the EU agreed to delay the introduction of a tax on re-exports from Switzerland for three months.

The new tax would have been imposed on products exported from Switzerland to the European Union made using raw materials imported from EU member states.

Earlier this month Germany imposed stringent border checks on people and vehicles entering the country from Switzerland.