Thursday, 30 December 2010

EU relations with Switzerland: End of the road for bilateral model

The blog post 'Liechtenstein under EU pressure on taxation' (28 December 2010) only scratched the surface, but let us go into more depth regarding taxation issues when readers and I feel like it.

Instead, we turn to Switzerland, the only European Free Trade Association (EFTA) country not to have joined the internal market through the European Economic Area (EEA).

The General Affairs Council (GAC) recently outlined the relations with the four EFTA countries:

Council conclusions on EU relations with EFTA countries; 3060th GENERAL AFFAIRS Council meeting Brussels, 14 December 2010

Financial contributions

There is a marked contrast between the EU's appreciaiton of the financial contributions by the the three EEA EFTA states Iceland, Liechtenstein and Norway and the expectations regarding Switzerland (paragraph 2):

2. The Council appreciates the financial contributions of the EFTA countries to the economic and social cohesion in the European Economic Area (EEA). Norway, Liechtenstein and Iceland (the "EEA EFTA States") recently committed themselves to a substantial increase of their continued contributions. The EU is looking forward to a constructive dialogue with Switzerland on the review of the current mechanism, expiring in June 2012. The Council hopes that a mutually acceptable solution will be found with the aim of reducing economic and social disparities in the EU.

End of the road for bilateral model

The EU Treaties Office Database records 179 agreements between the European Union and Switzerland.

It would be an exaggeration to say that the model of bilateral treaties is ”kaputt”, but according to the EU the system has reached the end of the road (paragraph 6):

6. Since Switzerland is not a member of the European Economic Area, it has chosen to take a sector-based approach to its agreements in view of a possible long-term rapprochement with the EU. In full respect of the Swiss sovereignty and choices, the Council has come to the conclusion that while the present system of bilateral agreements has worked well in the past, the challenge of the coming years will be to go beyond this complex system, which is creating legal uncertainty and has become unwieldy to manage and has clearly reached its limits. In order to create a sound basis for future relations, mutually acceptable solutions to a number of horizontal issues, set out below, will need to be found.

EU acquis

The European Union wants to guarantee a more level playing-field between businesses through the scope and implementation of the EU acquis (paragraph 7):

7. Though EU relations with the EFTA countries were extended over the years to many areas not covered by the internal market, these relations are mainly based on the progressive integration of the EFTA countries' economies into the EU internal market. In view of the need for a level playing field for all economic operators of the parties concerned and the continued development of internal market relevant acquis, the EU and the EFTA States should ensure homogeneity in the implementation of the acquis and the good functioning of the institutions.
The observations concern all the EFTA countries, but the procedures with the EEA members are more streamlined than with regard to Switzerland.

We look at specific remarks about Switzerland in a later blog post.

Ralf Grahn

P.S. Social Europe Journal (SEJ) is an important forum for political cross-border discussion, as presented by themselves: Debating politics in Europe and beyond. - Not to miss, if you are interested in EU level politics.