Switzerland's
drive to clinch a sweeping treaty putting its ties with the European Union on
firmer footing has run aground as mainstream conservative parties get cold feet
ahead of Britain's divorce talks with the EU.
A new treaty
could clear the way for closer ties in fields including financial services and
power markets, but fear that any deal might upset Swiss voters under the
country's system of direct democracy has put the project on hold.
Without a
new accord with its biggest trading partner, Switzerland would rely on a
patchwork of more than 100 bilateral agreements that ease access to the EU
single market. Many Swiss are happy with the status quo.
But the
government had made a treaty a legislative priority, and European Commission
President Jean-Claude Juncker and German Chancellor Angela Merkel have said it
was the price of any more trade deals.
Swiss
reluctance to follow through on an accord in the window before the EU's Brexit
negotiations start in earnest threatens to put relations into a deep chill that
could stall progress on unresolved trade issues.
The
eurosceptic Swiss People's Party (SVP), the country's largest, has opposed any
treaty that lets the European Court of Justice (ECJ) settle disputes.
The far
right has thundered against "foreign judges" dictating to sovereign
Switzerland, and conservative centrist parties have now essentially
capitulated.
"The
government has concluded that in a referendum-based democracy this 'foreign
judges' solution - having the European Court of Justice mediate in disputes -
is not winnable at the moment," Christian Democrats (CVP) leader Gerhard
Pfister said.
Pfister told
Reuters his CVP colleague and Swiss President Doris Leuthard and even Juncker
now agree that clinching a treaty by year's end is no longer realistic.
A European
Commission spokeswoman said: "We are making good progress since the
meeting between President Juncker and President Leuthard in April and are
confident that if efforts continue from both sides in that sense, the agreed
timetable can be met."
NOT MUCH AT
STAKE?
The CVP and
pro-business Liberals (FDP) each have two seats in the seven-member cabinet, so
an EU treaty is dead in the water without their backing.
As their
support faded, it undermined pro-Europe Foreign Minister Didier Burkhalter, who
this month announced his resignation and said a new cabinet player was needed
to change the political dynamics on Europe.
Still,
Pfister doubted a fresh minister could nudge Switzerland out of its "time
out" on Europe policy, especially as Swiss business leaders are not
lobbying hard for a treaty.
"Of
course it would help some politicians if business would fully support something
but right from the beginning we were skeptical," said Jan Atteslander,
head of foreign economic ties at business lobby Economiesuisse.
A treaty
would not in itself expand business ties, but instead set out how Switzerland
could fall under the aegis of EU institutions such as ECJ judgments or state
aid rules in return for market access.
"This
poses a problem as the Swiss do not want to be subject to these things. We have
been discussing this for over three years and are now in the 17th or 18th round
of talks," said a Swiss official familiar with the discussions.
The parties
now settle disputes though a joint commission, which under a treaty would do so
after guidance from the ECJ.
Pfister
suspected the EU was keen for a quick deal with Switzerland to "pacify the
Swiss flank" while turning its main attention to thorny Brexit talks with
Britain.
"We
will wait and see how the Brexit negotiations go and then perhaps adopt a
position similar to the UK," he added.
PREVENTING
TRIUMPH FOR FAR RIGHT
Pfister's
remarks reflect many Swiss conservatives' thinking that the freedom of movement
principle so dear to the EU - it allows the bloc's workers access to Swiss
jobs, and nearly prompted a crisis last year over Switzerland's plans for
immigration curbs - is bound to change over time.
This may
help Switzerland, which faces unease over immigration in a country whose
population is already a quarter foreign but is keen to preserve its EU market
access.
One EU
diplomat dismissed this as "wishful thinking", saying failure to lock
in ties with the bloc now could come back to haunt the Swiss.
"People
in Brussels don't like cherry-pickers. If things start to pick up in EU then
cherry-pickers will not be very popular," he warned.
Swiss
politics are driving the shifting mood. Other referendums looming on European
issues such as limiting free movement should be settled before holding a vote
on a treaty, Pfister said.
"If you
do it before (Swiss) elections in 2019 the risk is great that you would lose,
and that would hand the SVP a triumph that we wouldn't want to have," he
said.
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