Funding row taints Swiss-EU relations

The EU Cohesion Fund aims to help boost the economies of its new member states Keystone

Switzerland’s financial contribution to an enlarged European Union will be at the centre of discussions this week in Brussels.

This content was published on January 31, 2005 - 12:52

Both sides are at loggerheads over the wording of an accord and which countries should benefit from the SFr1 billion ($840 million) pledged by the Swiss.

The Swiss foreign minister, Micheline Calmy-Rey, will attempt to negotiate a deal with the European Commission on Tuesday.

Switzerland, which is not a member of the 25-nation bloc, has offered to contribute SFr200 million a year to the EU’s Cohesion Fund over the next five years.

The fund is aimed at boosting the economies of less prosperous member states, especially the ten new nations – mainly from central and eastern Europe – that joined the EU in May last year.

Switzerland is obliged to support EU cohesion under a second set of bilateral treaties, which were signed in 2004.

Legal precedent

Talks have stalled over what kind of accord should be signed between Switzerland and the EU.

Brussels would prefer a formal agreement, but the Swiss authorities – who are anxious not to set a legal precedent – only want a memorandum of understanding.

There has also been no agreement over which countries should benefit from Swiss funding and whether Switzerland should have control over projects.

While the Swiss insist that their contribution should only go to the ten new EU member states, Brussels wants the money spread among 13 nations.

Spain, Portugal and Greece, who also receive money from the Cohesion Fund, are demanding their share of Switzerland’s millions.

Swiss President Samuel Schmid discussed the issue on Monday with Luxemburg’s prime minister, Jean-Claude Juncker, whose country currently holds the EU's rotating presidency.

After their meeting, both men said they were confident a solution could be reached.

Juncker said he believed a memorandum of understanding would be a “sufficient guarantee”, but he cautioned that the final decision lay with the European Commission.

Losing patience

The Commission has begun to lose patience with the Swiss and recently wrote to Calmy-Rey to ask her to speed up negotiations.

The foreign minister has not taken kindly to pressure from Brussels, telling the media recently that the Swiss were not “puppets” and that she was “angered by the Commission’s attitude".

Her remarks have increased tension between Switzerland and the EU, although officials in Brussels have refused get involved in a war of words.

They consider Calmy-Rey’s remarks to be for domestic consumption, aimed at Switzerland’s eurosceptics ahead of upcoming votes on two key bilateral accords.

The chances of progress being made on Tuesday appear limited. The Swiss-EU Integration Office claims a memorandum of understanding is sufficient to cover Switzerland’s financial contribution.

“We have been cooperating with the EU for the past 14 years, and we want to keep on working the same way,” said one official.

The EU’s council of foreign ministers is also sticking to its guns, demanding a binding agreement with the Swiss and funding beyond the new member states.

“There has to be a formal agreement. A declaration of intent is not enough,” a source within the Commission told swissinfo. “We hope Micheline Calmy-Rey’s visit will help solve this problem.”

swissinfo, Barbara Speziali in Brussels

In brief

Switzerland has promised to contribute SFr1 billion to the EU's Cohesion Fund, at a rate of SFr200 million per annum for five years.

The EU wants a binding agreement with the Swiss over their contribution, while Bern only wants a memorandum of understanding.

The Swiss also want their contribution to only go to the ten new EU member states, but Greece, Spain and Portugal want a share of the funds.

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