The European Union and Switzerland have enforced new restrictions which affect each other’s financial firms. It is a remarkable deterioration in what has long been a close economic relationship.
Investment firms in the EU are no longer allowed to trade on the Swiss stock exchange. The arrangement, known as “ equivalence”, which previously permitted them to do that deteriorated at the end of June and the European Commission has decided not to renew it, for now at least.
This is one kind of wider issue between the two sides. The economic relations of Switzerland with the EU are ruled by about 120 separate bilateral agreements. These give Swiss businesses access to most of the single market of the EU.
But the EU wants to modify and simplify the arrangement with a new framework deal. The European Parliament has stated the latest condition as “ complex”, sometimes muddled and not easy to hold.
They have a draft of a new agreement, but the Swiss side first went for public consultation and have more recently asked for clarification. The EU has lost hope by the detention and has allowed the similarity arrangement for Swiss stock markets to expire.
The Swiss government has worried that the deal might lead to EU citizens receiving more welfare benefits.
They are also concerned that it might restrict government subsidies to businesses and make it harder to safeguard Swiss wages – which are high – from low campaign competition.