Relations with the EU: Switzerland is in a quandary

It was just 50.3 percent.

Thirty years ago, on December 6, 1992, the Swiss voted by a wafer-thin majority against joining the European Economic Area (EEA).

In French-speaking western Switzerland, which had voted in favor with a large majority, the horror was great.

The project was also controversial in the Bundesrat, as the multi-party government in Bern is called.

Since the EEA Agreement had major weaknesses from a Swiss perspective, the Federal Council interpreted it as an intermediate step on the way to full accession to the European Community (EC), the forerunner of the EU.

That turned out to be a through ball for right-wing conservative politician Christoph Blocher.

Insisting on Switzerland's independence, he gained even more support for his campaign against EEA membership.

As painful as the defeat in the referendum was for the Bundesrat, the application lodged in Brussels to start negotiations on accession to the EC later helped it out of the jam.

Assuming that the Swiss would later find their way into the Union, the EU agreed to a package of bilateral agreements after years of negotiations.

These gave Switzerland direct access to the European single market in important areas.

The export-strong country benefits from this connection even more than most full members of the EU.

In Swiss European policy, the so-called bilateral path is therefore still the silver bullet.

But this threatens to end in a dead end.

The first consequences of the breakdown in negotiations are visible

Since the bilateral agreements were only designed as a temporary compromise solution, gaps were left.

There is no mechanism for settling disputes and no rules for adopting EU law.

Overall, the institutional framework agreement, which had been negotiated for many years, offered good solutions to these and other problems.

But in May 2021, the Federal Council wiped the agreement off the table.

The domestic and party-political opposition seemed too great to the discouraged government.

The first consequences of the unilateral breakdown in negotiations are already visible: the EU Commission refused to update an agreement on the mutual recognition of medical technology products.

The same is threatening the much more important machine and metal industry in the coming year.

Swiss research is also affected: in the large EU research program Horizon Europe, Switzerland only ranks as a non-associated third country.

This makes it difficult or impossible to participate in important European research projects.

Therefore, Swiss universities fear that they could lose their brightest minds.

For the EU, the extensive exclusion of scientific luminaries from Switzerland is of course also a loss.

And new bureaucratic hurdles in the exchange of goods are not causing any jubilation in the countries bordering Switzerland.

Brussels has therefore agreed to new talks with Bern.

There have been initial approaches to areas of conflict such as the agreement on the free movement of persons and state aid.

As much as the Swiss economy benefits from the fact that it can easily hire skilled workers from the EU, the large-scale immigration is a source of dynamite in socio-political terms.

Both sides have to move

The debate on foreigners has made Blocher's Swiss People's Party (SVP) by far the strongest political force.

In this respect, Brussels would do well to grant protective clauses to Switzerland, which is particularly attractive due to the high wages.

These would take effect as soon as a certain quota of foreigners has been reached.

But Switzerland also has to move.

Since the SVP refuses any rapprochement with the EU, a lot depends on the left.

The Social Democrats would have to break free from the leadership of the unions and give in to the heated debate about "wage protection".

The principle of “equal pay for equal work at the same place” is legally anchored in the EU.

The high Swiss wage level would therefore not be endangered even if the European Court of Justice ultimately monitored compliance with the agreement on the free movement of persons.

But Bern is also under pressure to reach an agreement because of the new geopolitical situation.

In winter, Switzerland is dependent on energy supplies from abroad.

However, Brussels will only negotiate the coveted electricity agreement with the EU when a solution is in sight for all other disputed issues.

There is still a long way to go until then.