Swiss get green light on new EU negotiations

Bulding further bridges with the European Union may prove difficult for the Swiss. "Audiovisual Library European Commission"

Switzerland received the green light from the European Union on Monday to begin substantive talks on a new series of bilateral agreements.

European Union foreign ministers agreed on Monday to discuss the mandates for a series of outstanding dossiers on forging closer ties with Switzerland.

The first round of negotiations focusing on the issue of taxation of EU citizens’ savings is due to begin on Tuesday in the Swiss capital, Bern.

Although preliminary talks started months ago, the two sides had been deadlocked over the framework for negotiations.

“We wanted a global approach with the aim of reaching a balanced result,” said a spokesperson at the Swiss mission to the EU.

The EU decision means the ten dossiers will now be negotiated as a single package. Brussels had previously made it clear it wanted to start talks immediately on forging an agreement on cross-border crime, while leaving the others on the back burner.

The cross-border crime dossier is the most sensitive because it has implications for banking secrecy, which the Swiss are determined to defend.

Taxation of savings

Brussels is putting heavy pressure on Switzerland to give way over the cross-border crime dossier, which deals partly which the issue of tax evasion.

The reason is because the EU wants to introduce internal laws compelling its member states to report income paid on citizens’ savings held in other countries so it can tax them accordingly.

EU member states such as Austria and Luxembourg, whose economies rely heavily on managing foreign assets, say they won’t reveal the identities and savings income of their EU clients to Brussels unless and until other banking centres such as Switzerland do the same.

The result has been deadlock because this would compromise Swiss banking secrecy and the Bern has repeatedly said it is not up for negotiation. Instead, it has proposed introducing a withholding tax on the interest earnings of EU citizens in Switzerland.

Support from parliament

The Swiss government last week received the backing from parliament for its policy towards Brussels. The Senate said relations with the EU should be based on bilateral accords.

The speaker for the foreign affairs committee of the Senate, Bruno Frick, acknowledged that it was not easy to negotiate bilateral treaties, but he said it was the only way forward.

The Senate ruled out negotiations on full EU membership because voters last year overwhelmingly rejected such a proposal.

The foreign minister, Joseph Deiss, underlined the government’s intention to conclude a second set of bilateral treaties. But he dismissed calls to formally withdraw an application, submitted to Brussels in 1992 and subsequently shelved, for full membership talks with EU.

by Urs Geiser