Switzerland to honour CHF1.3 billion EU cohesion payment

Ignazio Cassis speaking at the press conference in Bern on Friday ©KEYSTONE/ PETER SCHNEIDER

The Swiss government says it will make good its commitment to hand over CHF1.3 billion ($1.33 billion) for improving living standards in less well-off European Union states despite an ongoing stand-off with the EU over bilateral relations.

The second batch of so-called “cohesion” payments was put in some doubt after the EU restricted the Swiss stock exchange’s access to the European market to one year. But the government on Friday said that, after a review of the situation, the funds would be released.

“In order to safeguard its prosperity in the long term, Switzerland depends on a secure, stable and prosperous Europe. It therefore has a vital interest in continuing to use its expertise to strengthen European cohesion and improve the management of migration flows,” the governing Federal Council stated.

The funds will be spread over 10 years, primarily targeting vocational training and migration. In addition, Switzerland says it wants to tighten up asylum regulations with the EU to “help support programmes to encourage persons residing illegally in EU partner countries to return to their home countries.”

But the government added that parliament could “reconsider the situation” if the EU failed to live up to Swiss expectations during continued negotiations on the framework conditions that will govern bilateral ties in future.  

“Calm atmosphere”

While not a member of the EU, Switzerland has negotiated a number of bilateral treaties with its largest trading partner. But the current relationship can only continue if the two sides can agree to a new over-arching framework of conditions.

The sticking points include access to the Swiss labour market for EU workers, Swiss rules that prevent EU companies from undercutting local wage levels and continued access for Swiss financial industry players in Europe.

The government said it would carry on with EU negotiations according to the current mandate it has received from parliament. It will also domestically “maintain contact with the social partners [labour union] with a view to ensuring a calm atmosphere in Switzerland while the negotiations with the EU are continued.”

“The Federal Council has repeatedly stressed the importance of good cooperation with the EU and affirmed its desire to consolidate bilateral relations,” the statement read.  

Unions defiant

However, trade unions responded defiantly to the government’s statement. Travail Suisse issued a statement demanding that measures should remain to protect Swiss wages. “If the accompanying measures are violated, the framework agreement will have no chance in the eyes of the people,” the statement read.

Daniel Lampart, chief economist at the Swiss Federation of Trade Unions told the Swiss News Agency that if wage protection is taken out of the deal: “Then it is dead. We think the Federal Council should break off the negotiations.”