Switzerland and the European Union

Clive H. Church, Clive H. Church

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781134194353
• Edition: 1
• Topic: Política y relaciones internacionales
• Subtopic: Política

Despite its geographical centrality and its considerable economic involvement in Europe, Switzerland remains unusual in that it is neither a member of the European Union or the European Economic Area. At a time when the Union is both expanding and seeking to develop its integration, the country constitutes a real anomaly amongst west European states.

This book demonstrates the range, depth and complexity of Switzerland's developing relations with Europe and provides detailed and up-to-date information on Switzerland itself. Considering a variety of dimensions of the country and its ambiguous relations with the EU, the contributors, all of whom are leading specialists on Swiss-EU relations, explore:

• the classical political obstacles to entry: federalism, direct democracy, neutrality and the growing strength of anti-European populism
• policy barriers to integration: in trade and economics generally, in financial matters, and in social provisions relating to the movement of people
• the negotiation of the two sets of bilateral accords which presently structure Swiss relations with the Union
• the EU response and the prospects for future Swiss-EU relations.

Switzerland and the European Union will appeal to specialists on Switzerland, academics and students in politics and international relations, and practitioners in European integration and Swiss politics.

1 Introduction

Clive H. Church

Not many months ago a serving officer in the Royal Air Force was quoted in The Times as saying that he wanted Britain to emulate Switzerland and have nothing whatsoever to do with the European Union [EU].¹ His assessment is widely shared. So, when Pascal Lamy said that, if Britain chose to vote “No” to the Constitutional Treaty, it could finish up in the same situation as Switzerland, many Eurosceptics carolled “Yes please!”.² Yet such views are based on a misapprehension because Switzerland actually has a great deal to do with the EU even if it is not a member and sometimes seems to share the British desire for “splendid isolation” from Europe. In fact Switzerland is surprisingly deeply integrated in “Europe”.³ In other words, the Swiss–EU relationship, as well as being misunderstood, is close and somewhat contradictory.

The Swiss anomaly

Hence if, as HM the Queen once said, the British constitution is a bit of a puzzle, the same might be said of Switzerland.⁴ For the country is, in many ways, an anomaly. On the one hand, it is a very European country: culturally, geographically, linguistically, politically and in its economic involvement in the Single Market. One Swiss job in three is said to depend on this. Indeed, one senior Swiss diplomat said “Economic relations between Switzerland and the EU are of such a density that they cannot be limited by judicial texts”.⁵

However, it also has two sets of more general bilateral legal accords, the second approved in June 2005 and the first initially agreed in May 2000 and successfully extended to the ten new member states in September 2005. Equally, it has often had more technical agreements with the European Union than any other non-member state while its legislation has been “Euro-compatible” for many years. In fact more than half of its economic legislation derives from the EU and often, as with the E111 card, has to be accepted willy-nilly. All this means that it is subject to a high degree of Europeanization⁶ and this in a wide variety of fields. Conversely, in some circumstances, it can exercise a restraining influence on EU policy-making, as was the case with withholding taxes.⁷

Moreover, it has a government committed in principle, at least till recently, both to programmes like Schengen and to eventual membership of the Union. Sizeable elements of party and public opinion support this point of view, often with great commitment. They want to see a more active and outward-looking Switzerland in line with the country’s innate European nature. Indeed recent polls suggest that between 46 per cent and 66 per cent of the population are in favour of entry.⁸ Similarly the Union would be very open to Swiss membership. Indeed Eurobarometer polls regularly suggest that 78 per cent of EU citizens would like to see Switzerland as a member, compared to only about 40 per cent who would welcome more Balkan states.⁹

Yet, on the other hand, along with Norway, Switzerland is the only small (as opposed to micro) state in continental western Europe which is not part of the Union.¹⁰ Indeed, contrary to myth, the country has never yet voted on the general principle of entry to the EU. This reflects deep-seated reservations about Swiss involvement not just with Europe but with all international organizations. Increasingly these have been focused by well-organized and vociferous opposition movements, spearheaded by the Swiss People’s Party [SVP/UDC]. So, after the 1992 popular rejection of entry into the European Economic Area [EEA] the government had first to freeze its application for membership and then to delay its reactivation. Similarly, even the technical agreements signed with the EU have come under pressure from those who fervently want the country to remain an island in the middle of the EU sea. The European question is, in other words, the most divisive issue in Switzerland and has helped to polarize and ideologize the Swiss party system in a way which has not happened in Norway.

To some extent, the political divide on Europe coincides with the country’s linguistic and social divisions. French-speaking and urban areas were thus much more pro-European than German-speaking and rural districts. The decline of religious affiliations, the eclipse of cantonal boundaries and, especially, the segmentation of the media have all helped to make the question more sensitive and salient. This was very much the case in 1992 when the Swiss rejected entry into the EEA, something which was bitterly resented in the Suisse Romande. For, while the Italian community voted against entry, French speakers were in favour by a large majority but were overcome by hostile votes from German-speaking areas.¹¹

Since then other issues, both European and domestic, have reinforced the divide although there have also been countervailing factors so that the divide has never become violent or destabilizing. Nonetheless, it remains an underlying problem and one of much concern to most Swiss because it threatens confederal unity. However, evidence from recent votations (or referenda) suggest that the gap between the two sides is lessening.¹² The Suisse Romande has become less enthusiastic about European integration and more willing to welcome political movements opposed to it while German-speaking Switzerland has lost some of its old scepticism. As a result the September 2005 votation on extending rights of free movement to the new EU member states showed a real alignment between the two regions.

Coming to terms with the Swiss situation

Such division and uncertainty about Europe is not a quaint quirk of fortune with no real impact or interest for others. For, despite its relative smallness, Switzerland is a significant country which matters not just to the Swiss themselves but also to the EU and its member states. For the Swiss the European issue raises questions not only about their relationship with the outside world but about their own identity and internal political development. This is because entry would require more sacrifice of identity than in most other countries. Swiss ambiguities also raise questions both about the EU’s relations with the rest of Europe and its own nature and territorial limits. Hence the Swiss relationship with the EU cannot be understood as an abstract. It needs an awareness of Swiss specificities. Yet, despite its importance and political sensitivity, neither the details of Swiss relations with the EU, nor their causes, are well known in Britain or, indeed, in many other member states. Equally, ideas that Switzerland offers a model for European integration are not widely shared. In fact the country suffers more than most small countries from a proliferation of myths and ignorance: mistakes, such as saying that the Swiss have voted against EU (rather than EEA) entry, are commonplace. So there is a clear case for examining the realities and settings of Swiss relations with Europe. Doing this is not to urge any particular strategy on the Swiss, or indeed on others. Deciding on what to do about EU entry should, and will, be a matter for the Swiss electorate. But knowing what the present-day Swiss situation in relation to Europe actually is, in all its complexity, may be helpful to those thinking about the future of European integration after the French and Dutch rejection of the Constitutional Treaty.

The year 2006–7 is a very good time to try and make such assessments. On the Swiss side, the Federal Council, the collegial Swiss executive, has refused to withdraw its application but it has now declared that membership is no longer the strategic aim it had been. Following on a suggestion made in the Council of States in 2000, this is now simply one option among a number of strengthening links with the EU, all of which will be considered in an updated report on integration policy. This has encouraged talk about an overall framework agreement, a “lite” form of membership and an agricultural free trade deal with the EU, although the government is clearly divided on such questions. Business has also made it clear that it rejects another idea now being floated, a customs union. All this has already stimulated discussion, not to say controversy, and this is unlikely to diminish in the near future.

Indeed, having gained domestic approval for all its bilateral deals with the Union, the country has already started re-assessing its future relations with the Union, especially in the light of the failure to agree a free trade deal with the USA. In other words, the popular endorsement of various bilateral deals in June and September 2005, which went rather against European trends, was far from ending debate. Both opponents and supporters have continued to mobilize.

The former are hoping to exploit the fact that entry is no longer the government’s preferred aim and push back Swiss involvement in “European construction”. Hence they are calling for a formal withdrawal of the frozen entry application and rejecting any further bilateral arrangements, especially if these take the form of a framework agreement with institutional links. They are also threatening action against the projected cohesion payment to the EU. Some want this cancelled and others want it decided by the Swiss alone, and targeted on the new member states, or subject to a detailed agreement with the EU, and payable to other states as well. Resolving this and getting the EU states to complete ratification of the various agreements was still going on in the spring of 2006.

Moreover, AUNS is considering launching a popular initiative which would ban entry or, at least, prevent any discussion of the subject for 20 years. The fact that Europeanization is still going on, as in the adoption of EU rules on food safety and air passenger rights, is also likely to focus attention on the issue.¹³ And there are also several regular opportunities for new votations such as on the extension of free movement to Bulgaria and Romania whenever they join the Union and when the first bilaterals come up for reconsideration in 2011.

Supporters have been less vociferous. However, the Social Democratic Party is still committed to entry. Other supporters are looking to the promised government report, due by the autumn of 2006, to help relaunch an intelligent debate. However, opponents are prone to dismiss the report as a farce because it is not independent but the product of the, to them, deeply compromised Integration Bureau.

Even if there were not the political pressures, the working of existing agreements could also produce controversy about Europe. Thus what is seen as Brussels’ “unhealthy” interest in things like ex-export trade and the low tax policies of cantons like Zug have caused annoyance. So too did German rejection of proposals for access to Zurich’s Kloten Airport. The fact that a bilateral relationship means, as does Europeanization, continuous adaption to EU norms also raises the possibility of new friction. This is despite the fact that the Swiss public now sees Europe as far less significant an issue than it did in 1995 notwithstanding the changing political balance. The latter has shifted towards opponents of integration, although both sides of the argument are, and will remain, very active. So the government still finds itself between the rock of economic gain – enlargement for instance being estimated as likely to add 0.75 per cent to Swiss GDP – and the hard place of domestic opposition.

On the Union side, if the enlargement process, coupled with some of the underlying causes of the rejection of the constitutional treaty, focuses attention on its relations with its neighbours, there is no great enthusiasm for further bilateral deals, though it might consider them if they are linked as were the first batch. Equally, it might consider a limited coordinating framework agreement. However, there are still reservations in Brussels about some Swiss stances. This is the case with money laundering, Alpine transit and banking secrecy. Indeed President Chirac has floated the idea of a tax on countries that allow this. More importantly, Greece, Portugal and Spain are still resisting their exclusion from the cohesion scheme and this is holding up EU ratification of the second round of bilaterals.

Yet, if many in the Union still believe that Switzerland will join the Union in the not too distant future, some external critics of the EU see the Swiss situation as being applicable to them. Indeed some opposition parties in Norway are now said to be enviously eyeing the Swiss arrangement. And, as already noted, what is believed to be the Swiss solution appeals to many opponents of British membership of the EU. The questioning of the existing model of integration unleashed by the referenda in France and the Netherlands in May and June 2005 may well encourage such feelings. Yet, if the Swiss often like to think that their federal process is a model for Europe, this actually implies a degree of consolidation that many British Eurosceptics would resist.¹⁴ All this is likely to mean that Swiss–EU relations remain a key topic on the agenda in coming years.

The aims of the book

In order to assist understanding of all this the book, which is probably the first, and certainly the most up-to-date, detailed survey in English of Switzerland and its relations with Europe, has three main purposes. First, it seeks to provide hitherto unavailable information on the Swiss side of the relationship across a range of fields. Second, it tries to explain the complexities and contradictions of the relationship. It does this, on the one hand, by looking at the factors which both limit and encourage Swiss attitudes toward the EU. In other words, it looks at the classical obstacles to integration. These are essentially political although economic and social questions are closely related to political doubts. But it also tries to bring out the countervailing factors which encourage increased involvement. Thus, it brings in relevant theoretical and conceptual approaches which help to deepen understandings of such relationships as those involving Switzerland, Norway and the EU, notably the idea of “Europeanization”.

Third, it seeks to set these problems in their context: of general Swiss foreign policy, of the legacy of earlier Swiss dealings with Europe and of the EU response to Switzerland. Taken together with a detailed examination of the two sets of bilateral agreements, by which the Swiss have sought to fill the gaps left by their rejection of entry to the EEA in 1992, this provides a basis for following Swiss–EU relations over the coming years.

The book therefore considers present and future relations in a balanced way, bringing together, as it does, Swiss experts from a variety of disciplines, along with outside observers of Switzerland. However, it does not aim to give lessons to the Swiss, merely to make better known and understood both their involvement in European integration and their reservations about EU membership. Equally, the aim is not to demonstrate that Switzerland is the ideal model for further European integration, thanks to its experiences in 1848 and after. Rather the book seeks to highlight the range, depth and complexity of a small state’s relations with Europe and not to urge a particular form of relationship on either the EU or the Swiss. So the focus is less on the EU and more on Switzerland, especially as it is today.

As a result the book falls into three main sections. The first analyses the key political factors involved in encouraging reservations about wider international involvement such as European integration. Here the key obstacles to entry are direct democracy, federalism and neutrality – all basic components of Swiss identity and things which have formed the basis...