

Brexit: no leverage on a Swiss deal 21/09/2016

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impasse created by the 2014 referendum. In what seems to be a never-ending saga, negotiations between Switzerland and the EU over immigration resumed yesterday in a further attempt to resolve thecreated by the 2014 referendum.

Locking horns were Swiss president, Johann Schneider-Ammann and European Commission president Jean-Claude Juncker. They met in Zurich on the 70th anniversary of Winston Churchill's "Europe speech" in which he called for the creation of a United States of Europe (of which the UK was not to be a part).



For all that, the bottom line – we have been told – is that there is no deal on the table. Nevertheless, Schneider-Ammann is "very satisfied" with a "conversation" which must end one way or another by next February when the constitutional deadline set by the 2014 referendum runs out.



Talks have been made more difficult by the UK's decision to withdraw from the EU, with Switzerland hoping to complete its own deal with Brussels before the so-called "British question" has to be addressed.



Juncker agrees that Brexit has complicated the situation, but he is saying that there can be no common immigration/free movement deal for both countries. Any deal with the Alpine state must be "



This leaves the Swiss government trying to broker a compromise deal where it sidesteps the quotas demanded by the referendum and agrees "temporary limits" on immigration in certain regions or job sectors.



The Commission President has not displayed any wild enthusiasm over the idea, but has conceded that the Commission may not have any objections to Switzerland "gently privileging" the domestic workforce in this way.



Thus, although there is no deal in sight, Juncker claims to be "more optimistic" than he was in previous weeks, with the talks moving in "the right direction".



However, there is now an added complication as Brussels wants changes to the "institutional framework" of the Swiss-EU treaties as part of the deal. Specifically, it wants to add a "dynamic" element to the treaties, where Swiss laws change automatically as EU rules evolve.



The lack of this element has been one of the main reasons why the Swiss-EU deals have lost favour with the EU, as contrasted with the EEA, where there is a semi-automatic mechanism for updating the Agreement, each time EU laws are added to the Single Market acquis.



There is also some talk of the Swiss having to accept rulings of the European Court of Justice, although that would almost certainly require a referendum which, with almost equal certainty, the government would lose.



Bern, in any case, is fighting Brussels over the linkage, which had Schneider-Ammann putting his objections on the line to Juncker.



Anything put to the Swiss will, of course, have to get past the "ultra-conservative" Swiss People's party. And as long as this party continues to be led by "veteran nationalist" Christoph Blocher – who led the successful 1992 campaign against Swiss membership of the EEA – Schneider-Ammann will have trouble selling institutional changes.



However, even now, with the tepid concessions on offer over freedom of movement, this breaches the dam of absolutism, proving that this issue is, after all, negotiable.



The ultimate irony is that in 1992 when Blocher led the country to reject the EEA, Switzerland was already party to a deal, alongside Liechtenstein, which would have allowed it to impose exactly the quota solution that it is now trying to negotiate.



Having agreed the



But when Schneider-Ammann and Juncker meet again in October, he must be hoping they come up with something better than yesterday's plan, or there will be another crisis brewing in February in addition to Brexit.



Then, if Switzerland is tempted to impose unilateral quotas, that would bring the whole raft of 120 Swiss-EU treaties crashing down. Under the so-called guillotine provision, breach of one treaty nullifies them all. That, it is estimated, could cost the Swiss economy 32 billion francs ($33 billion) a year in potential economic output.



By comparison, Mrs May would seem to have a relatively easy time ahead of her - unless she is mad enough to think of adopting the WTO option. Locking horns were Swiss president, Johann Schneider-Ammann and European Commission president Jean-Claude Juncker. They met in Zurich on the 70th anniversary of Winston Churchill's "Europe speech" in which he called for the creation of a United States of Europe (of which the UK was not to be a part).For all that, the bottom line – we have been told – is that there is no deal on the table. Nevertheless, Schneider-Ammann is "very satisfied" with a "conversation" which must end one way or another by next February when the constitutional deadline set by the 2014 referendum runs out.Talks have been made more difficult by the UK's decision to withdraw from the EU, with Switzerland hoping to complete its own deal with Brussels before the so-called "British question" has to be addressed.Juncker agrees that Brexit has complicated the situation, but he is saying that there can be no common immigration/free movement deal for both countries. Any deal with the Alpine state must be " Swiss-specific " and separate from negotiations on Brexit.This leaves the Swiss government trying to broker a compromise deal where it sidesteps the quotas demanded by the referendum and agrees "temporary limits" on immigration in certain regions or job sectors.The Commission President has not displayed any wild enthusiasm over the idea, but has conceded that the Commission may not have any objections to Switzerland "gently privileging" the domestic workforce in this way.Thus, although there is no deal in sight, Juncker claims to be "more optimistic" than he was in previous weeks, with the talks moving in "the right direction".However, there is now an added complication as Brussels wants changes to the "institutional framework" of the Swiss-EU treaties as part of the deal. Specifically, it wants to add a "dynamic" element to the treaties, where Swiss laws change automatically as EU rules evolve.The lack of this element has been one of the main reasons why the Swiss-EU deals have lost favour with the EU, as contrasted with the EEA, where there is a semi-automatic mechanism for updating the Agreement, each time EU laws are added to the Single Market acquis.There is also some talk of the Swiss having to accept rulings of the European Court of Justice, although that would almost certainly require a referendum which, with almost equal certainty, the government would lose.Bern, in any case, is fighting Brussels over the linkage, which had Schneider-Ammann putting his objections on the line to Juncker.Anything put to the Swiss will, of course, have to get past the "ultra-conservative" Swiss People's party. And as long as this party continues to be led by "veteran nationalist" Christoph Blocher – who led the successful 1992 campaign against Swiss membership of the EEA – Schneider-Ammann will have trouble selling institutional changes.However, even now, with the tepid concessions on offer over freedom of movement, this breaches the dam of absolutism, proving that this issue is, after all, negotiable.The ultimate irony is that in 1992 when Blocher led the country to reject the EEA, Switzerland was already party to a deal, alongside Liechtenstein, which would have allowed it to impose exactly the quota solution that it is now trying to negotiate.Having agreed the 1999 Treaty on the free movement of persons – without insisting on safeguard measures, the Swiss in this respect are in a worse situation than they would have been had they remained in the EEA. One wonders whether Christoph Blocher appreciates the irony, or is even aware of it – Swiss politicians largely having forgotten about this episode in their history.But when Schneider-Ammann and Juncker meet again in October, he must be hoping they come up with something better than yesterday's plan, or there will be another crisis brewing in February in addition to Brexit.Then, if Switzerland is tempted to impose unilateral quotas, that would bring the whole raft of 120 Swiss-EU treaties crashing down. Under the so-called guillotine provision, breach of one treaty nullifies them all. That, it is estimated, could cost the Swiss economy 32 billion francs ($33 billion) a year in potential economic output.By comparison, Mrs May would seem to have a relatively easy time ahead of her - unless she is mad enough to think of adopting the WTO option.





