Switzerland's misleading model

The EU helps Eurosceptics when it allows Switzerland to be in the single market while pretending to be outside of it.

Last week, when Dutch Eurosceptic politician Geert Wilders unveiled a much-anticipated 'nexit study' (Netherlands exit from the EU), Switzerland featured prominently in the press conference.

The wealthy Alpine nation, about the same size as the Netherlands geographically, was held out as the paradise which would await a country if it leaves the EU.  Mark Pragnel, an analyst at British firm Capital Economics, which conducted the study, said Switzerland’s bilateral system of treaties with the EU is a model that the Dutch should emulate. “We think the Swiss option is viable for the Netherlands,” he said.

The argument is not new. Switzerland often features prominently in British debates about leaving the union. Not being in the EU hasn’t harmed economically thriving Switzerland, so why would it harm the UK? In fact, Switzerland’s success is often held out as being the result of, rather than in spite of, the country not being subject to EU law.

But this narrative is false. Switzerland is in fact part of the EU’s single market and it has to follow most EU law. Like the European Economic Area (EEA) countries Norway, Iceland and Liechtenstein, Switzerland exists in a ‘fax democracy’. Its ten bilateral treaties with Brussels, which mirror EEA membership in all but name, bind the country to follow EU law in agriculture, transport, trade, public procurement, environment, free movement and border control.

Switzerland buries its head in the sand

Switzerland's foreign minister was in Brussels yesterday for some awkward discussions with EU leaders, and despite the beaming smiles following her meetings it was clear that by this point Brussels and Bern are operating on two different wavelengths.

The visit was arranged following a serious souring in relations between Switzerland and the EU after a resolution from EU foreign ministers in December warned that the relationship between the two had become incoherent and unwieldy. While Switzerland is not a member of the EU, it is a sort of "pseudo-member" and is allowed to participate in the EU single market thanks to a series of bilateral agreements. These 120 agreements were negotiated in two rounds in 1999 and 2004. In exchange for allowing Switzerland the benefits of access to the common market, the EU expects certain things in return - such as the right for any EU citizen to live and work in Switzerland (and vice versa). But in return, the EU position is that if Switzerland violates any of these accords, all 120 of them will be torn up.

So far this arrangement has suited the Swiss just fine - probably because most Swiss citizens are unaware of the extent of the accords and think their country remains completely independent and separate from the EU. But Brussels has grown frustrated with the unwieldy and complicated arrangement, and now they are saying Switzerland needs to move over to a more defined relationship as exists in the other pseudo-EU countries - Norway, Iceland and Liechtenstein.

EU gets tough with Switzerland

Any Swiss citizen working in the EU, or vice versa, should take note of some stern language used toward Switzerland by EU foreign ministers in Brussels yesterday. Warning Switzerland that the system of bilateral agreements that govern the Alpine country's relationship with the EU has "clearly reached its limits," the ministers called the current arrangement incoherent and unwieldy. Switzerland, they warned, is in danger of losing its rights for free movement of goods, persons, services, and capital with its neighbours.

Switzerland's relationship with the EU is governed by a complex system of bilateral agreements which make the country a sort of "semi-member state". Switzerland has to follow certain areas of EU law, but doesn't have to follow others. It participates in the free movement provisions of EU law, which means that any EU citizen can work in Switzerland, and vice versa. It also participates in certain common market rules, but is not part of the customs union (which is why you can buy tax-free goods when flying from Switzerland to elsewhere in Europe). At the same time, as a non-EU member it gets no European Commissioner, has no vote in the European Council and does not have MEPs in the European Parliament.