Parliament sets conditions on further EU payments

Justice Minister Karin Keller-Sutter and Foreign Affairs Minister Ignazio Cassis listen to the debate in the House of Representatives on Monday Keystone

Switzerland should only make another billion-franc “cohesion” payment to the European Union if the EU doesn’t discriminate against Switzerland, parliament has agreed. 

The House of Representatives on Monday approved the CHF1.3 billion ($1.3 billion) that will help reduce the economic and social inequalities between old and new EU countries over the next decade. The Senate agreed with this view on Tuesday.

A previous Swiss financial package to improve living standards in the EU will run out shortly. 

The majority of parliamentarians believed the cohesion payments were in Switzerland’s interests and were the price of market access. 

The funds are to be split into two separate slices. Some CHF1.1 billion is aimed at vocational training programmes and efforts to combat youth unemployment in EU member states in central and eastern Europe over the next ten years. The remaining CHF190 million is destined for migration aid in the whole of the EU. 

However, the House of Representatives wanted to redistribute the funds, shifting some CHF190 million from the CHF1.1 billion to the migration aid. 

For and against

A sizeable minority of politicians said Switzerland should withhold the payments. “The EU is talking about a friendship treaty with the framework agreement, but wants to force us to sign,” said Roger Köppel of the rightwing People’s Party. “It says: ‘If you don’t sign this friendship treaty, we will continue to put pressure on you, we will bring you to your knees'”.

But Hans-Peter Portmann of the centre-right Radicals said Switzerland is paying far less per capita than other countries. “We pay just  CHF15 per inhabitant if we release this payment. But the value of the bilateral agreements is CHF4,500 per year for all of us in our wallets.”

Framework conditions 

The second batch of cohesion payments was put in some doubt after the EU restricted the Swiss stock exchange’s access to the European market to one year. But in September the government said that, after a review of the situation, the funds would be released. 

But it added that parliament could “reconsider the situation” if the EU failed to live up to Swiss expectations during continued negotiations on the framework conditions that will govern bilateral ties in future.  

While not a member of the EU, Switzerland has negotiated a number of bilateral treaties with its largest trading partner. But the current relationship can only continue if the two sides can agree to a new over-arching framework of conditions. 

The sticking points include access to the Swiss labour market for EU workers, Swiss rules that prevent EU companies from undercutting local wage levels and continued access for Swiss financial industry players in Europe.