Opposition from Switzerland’s four-party, seven-member Cabinet means the Swiss government will not sign a draft treaty with the European Union next month. For a decade, Brussels has sought to pull the economically rich and direct democracy nation into the EU and is applying increased pressure ahead of European Parliament elections. The rapid surge in support for nationalist parties that reject the loss of sovereignty EU membership entails will dominate the future direction of the bloc. European Commission President Jean-Claude Juncker has urged the Swiss to do a deal while he is still in office, but this looks increasingly unlikely.
The treaty would require non-EU member Switzerland to routinely adopt EU single market rules and have EU citizens in Switzerland enjoy the same rights as in their home countries. It would open the possibility of new trade deals, such as for an electricity union combining Swiss and European utilities. The EU has ruled out renegotiating the treaty.
Opponents range from the nationalist Swiss People’s Party, which calls the treaty an unacceptable infringement of sovereignty, to the left-wing Social Democrats, who reject diluting Swiss rules that protect Europe’s highest wages from cross-border competition. Only Foreign Minister Ignazio Cassis of the Liberal party actively supports the treaty, which has been negotiated over four years. A Swiss government spokesman said only that the cabinet discussed the situation regularly and would communicate its decision by summer.
The EU claims the lack of an agreement would risk ties with Switzerland, its biggest trading partner, and potentially disrupt trade and cross-border securities deals. The EU accounts for 60 percent of Switzerland’s foreign trade by volume, but the Swiss appear unconcerned and unwilling to be pushed around.
The Swiss Cabinet is currently focused on a domestic campaign to end the free movement of EU citizens in their country in a referendum next year. Though Switzerland is not part of the EU, it is part of the Schengen Zone. The referendum is considered to be Switzerland’s Brexit.
Unlike EU members states, Switzerland has 120 sectoral accords that govern their ties with the bloc, which would remain in place in the absence of a new treaty. The European Commission has threatened not to extend beyond mid-2019 the recognition of Swiss stock exchange rules that lets EU investors make trades there.