Stock exchange limitation prompts Swiss indignation

Leuthard addressing the media following an extraordinary session of the seven-member government on Thursday Keystone

The Swiss government has dismissed as discriminatory a decision by the European Union to grant only limited access to the stock market exchange and is reconsidering its pledge for a CHF1.3 billion ($1.32 billion) payment to the 28-nation bloc.

“Switzerland fulfils the conditions for recognition of stock market equivalence every bit as much as the other third countries that have been granted indefinite recognition,” President Doris Leuthard said in a statement following an extraordinary meeting of the Federal Council on Thursday.

She also announced the government had decided to bolster the competitiveness of Switzerland’s financial sector by preparing to drop the stamp duty – a tax on securities trading and insurance transactions.

Leuthard said the government had strong doubts about the legality of the EU decision, adding that the linking a technical bilateral dossier with institutional issues was unacceptable.

Brussels said on earlier this week it would make unlimited access to the EU stock market exchange subject to substantial progress in negotiations with Switzerland about a treaty encompassing the existing more than 120 bilateral accords.

+ Read more about the EU’s announcement

“Today’s decision by the European Union also risks harming bilateral relations on other important dossiers,” Leuthard said on Thursday. She added the Swiss government wants to develop these relations despite significant differences.

“A prerequisite for overcoming these differences is the willingness of both parties to hold objective discussions in an atmosphere of trust.”

Tarnished optimism

The row comes a month after a visit to Bern by EU Commission President Jean-Claude Juncker. Then, both sides expressed optimism about the end of stalemate following Swiss voters’ decision to re-introduce immigration quotas for EU citizens.

+ Swiss-EU relations: Progress and setbacks

In a first reaction, the rightwing Swiss People’s Party with its strong anti-EU stance, has criticised the government for its lack of leadership, calling for immediate retaliation, including the suspension of Swiss participation in a resettlement programme for immigrants in EU countries.

The other two centre-right parties called the decision by Brussels “unacceptable”.

For its part, the leftwing Social Democratic Party called on the government to de-escalate the row with Brussels. It argues it was wrong to boost “stock market speculators” by planning to drop the stamp duty.