(Bloomberg) -- Switzerland’s vote on guns and tax augurs well for its at-times frosty relationship with the European Union just weeks before it faces the next showdown.
Swiss voters on Sunday declined to put their country’s membership of Europe’s open-border Schengen area at risk and accepted new restrictions on semi-automatic firearms. They also gave a revision of the corporate tax code a green light and thereby avoided landing on an international blacklist of countries that don’t play by the rules.
Yet recognition of the Swiss stock exchange under the EU trading rules expires at the end of next month, and Brussels has made continued access contingent on Bern agreeing to a “framework” deal that’s unpopular with the electorate.
Sunday’s vote “is a positive step for a better relationship with the EU, but it is a small step in comparison to the problem we have now with the framework agreement,” said Philippe Monnier, a business consultant who helps foreign companies invest in Geneva.
The framework deal is designed to replace an existing range of treaties from agriculture to immigration but in its current form is so unpopular in Switzerland that even government ministers appear somewhat reluctant to fully endorse it.
One of the most contentious elements of the plan would require changes to EU law to be automatically incorporated into Swiss law -- just like the EU’s member states do. That idea clashes with Swiss notions of self-determination and particularly riles members of the EU-skeptic Swiss People’s Party.
Labor unions, meanwhile, fear new provisions concerning cross-border workers will pressure wages that are much higher in Switzerland than in neighboring EU countries.
The Swiss government is likely to announce its next step regarding the ongoing disagreement with Brussels over the stock exchange in coming weeks. Losing so-called equivalence could lead to EU equity traders being shut out of the local market, causing a drop in volumes.
Swissmem, the association representing the machine, electrical and metals industry, supports the framework deal. The outcome of Sunday’s plebiscite was evidence of the public’s wish to maintain good ties with the rest of Europe, and “a further positive signal for the bilateral way,” it said.
--With assistance from Nikos Chrysoloras.
To contact the reporter on this story: Catherine Bosley in Zurich at firstname.lastname@example.org
To contact the editors responsible for this story: Fergal O'Brien at email@example.com, Jan Dahinten, Dylan Griffiths
©2019 Bloomberg L.P.