Swiss relations with the European Union are set to dominate the political agenda in the coming year, with continuing negotiations on closer ties, and a sensitive vote on opening membership talks due in March.

On March 4, Swiss voters are to cast their ballots on the so-called "Yes to Europe" initiative, which demands that the government begin immediate talks on EU membership.

The government has made full EU membership a future goal, but has signalled its opposition to the initiative, saying the move is premature. Political analysts say voters are likely to follow the government recommendation.

The evidence of past votes and opinion polls on Europe-related issues suggests that the Swiss are slowly coming round to the idea of EU membership but are likely to remain unconvinced for some years yet.

In the absence of public support, the government negotiated a series of bilateral agreements with the EU in a bid to break down trade barriers and to lay the ground for full membership in the future.

Voters on May 21, 2000 approved the seven bilateral accords, which are due to be implemented in 2001.

The agreements, which have still to be ratified by some of the EU's 15 member parliaments, govern relations in the areas of transport, trade, aviation, research, agriculture, public procurement and the free movement of people.

By far the most controversial are the accords governing transport and the free movement of people.

The transport agreement will gradually open Swiss roads from January onwards to 40-tonne lorries travelling between northern and southern Europe, fuelling fears of pollution and unsustainable pressure on the traffic network.

The agreement governing the free movement of people has sparked fears that Switzerland will be swamped by legions of disgruntled EU citizens, seeking a better life within Swiss borders.

In 2001, the government is to open talks on new bilateral agreements. Areas which the Swiss want to discuss include: processed agricultural products, education, the environment, services, statistics, the media and pensions.

The Swiss are likely to see the pensions issue as a major stumbling block, given that many EU countries are sitting on what has been described as a demographic timebomb. Almost all have state pension schemes and rapidly ageing populations, and it is unclear how governments are going to be able to fund pensions in the future.

The problem is far less severe in Switzerland, where the state funds a much smaller proportion of workers' pensions.

But before negotiations on new accords can begin, the EU has made it clear it wants the controversial issues of tax evasion and cross-border crime addressed.

Switzerland will face growing pressure to cooperate with the EU on the issues. Throughout 2000, Bern found itself having to defend its banking secrecy laws, against mounting criticism from Brussels.

The finance minister, Kaspar Villiger, has repeatedly stated that banking secrecy is "non-negotiable", but political analysts say it will not be long before Switzerland has to make some concessions if it is to progress on other bilateral issues.

by Jonas Hughes

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative