Switzerland-EU framework agreement: Better end the negotiations with dignity …

by Dr iur. Marianne Wüthrich

After 27 September (rejection of the “initiative for a moderate immigration” or “limitation initiative” by the sovereign), the framework agreement, which had been put on ice, should move forward rapidly. The Brussels grandees spent an evening applauding the Swiss people for their “good understanding of democracy”, but are now impatiently insisting on an early signature again. The strategy of the EU turbo-boosters in Federal Bern and elsewhere in the country was: let us first floor the initiative, then go through with the conclusion of the framework agreement. They were relying on the million-dollar carpet of information against the limitation initiative: “No to the destructive attack on the bilateral route” and similar lurid and untrue sayings should be instilled in the minds of voters and remain there at least until the agreement with Brussels is ratified, because there is no way around the Swiss people / Swiss voters. But first of all, things will turn out differently, and secondly, never as you think! The fundamental criticism of the “InstA” (Institutional Agreement) that has been voiced in the last two or three weeks is overwhelming. And it is even more astonishing to see which persons/personalities are heard about all this.

Obviously the long period of silence, which was further prolonged as a result of the Corona shutdown, also had its good points. One had more time to think the whole thing through.

Current situation

Following an “internal consultation”, which the Federal Council conducted with the cantons, political parties and social partners in early 2019, a number of points emerged on which the Federal Council had to insist: Retention of the accompanying measures on wage protection, exclusion of some provisions of the EU Citizenship Directive (UBRL) from “dynamic development” (immigration into social assistance, right of residence for social assistance recipients even in the event of prolonged unemployment), restriction of the EU ban on state aid.
  The latest plan – which has apparently already been jaded with Brussels – is the so–called “immunisation” of Swiss wage protection and the EU Citizenship Directive, i. e. their exclusion from the further development of EU law. The SonntagsZeitung comments: “In the federal administration, the immunisation strategy is seen as an elegant way to preserve as much sovereignty as possible. On the other hand, it is considered impossible to remove the principle of automatic adoption of EU law and of the EU court as a dispute settlement body from the treaty. These were core elements of the European market.”1 [emphasis mw]
  After all, the Federal Council wants to send a new negotiator to Brussels. The current negotiator, Roberto Balzaretti, is too soft, according to the Sonntags-Zeitung. What was needed was someone “who will signal greater firmness” and “make it clear to Brussels that it is not just a matter of clarifying a few points, but in fact of renegotiating the agreement.”2 [emphasis mw] On 14 October the Federal Council appointed the current ambassador in Paris, Livia Leu Agosti, to succeed Balzaretti. We shall see …

The fundamental issue of state sovereignty must be addressed

Already one week before the voting Sunday, former Federal Councillor Johann Niklaus Schneider-Ammann raised objections in principle to the framework agreement.3 This is astonishing not only because his party, the business party FDP, is the most stubbornly committed to the rapid signing of the agreement. But also because Schneider-Ammann was a member of the Federal Council from 2010 to 2018 and, in accordance with the principle of collegiality, had to support the entire negotiations with the EU.4
  According to Schneider-Ammann, it is not enough for Switzerland to address the three problems mentioned. “In the (post-)negotiations, it is imperative that the fundamental question of state sovereignty is also addressed. The balance found in the bilateral agreements between state sovereignty and access to the internal market has been lost in the draft of the InstA [framework agreement] at Switzerland’s expense.” Switzerland could neither accept that it would have to adopt future law, which is unknown today, nor that the rulings of the ECJ would be binding on the arbitral tribunal. Nor should Switzerland accept the extension of the guillotine clause (in the event of termination of the InstA, Bilaterals I and all new market access agreements would be terminated), as this would give the EU a great threat potential. Addressing some of the major players of the large corporations, the former Federal Councillor added: “If market access is given much greater importance than questions of state sovereignty, this may work out. But there is a risk that the people cannot be convinced of the need for such a radical transformation. A no-vote by the people would benefit nobody – not even the EU”.

No other country is better integrated into Europe than Switzerland

Schneider-Ammann calls on the Federal Council to defend itself against the pinpricks and threats from Brussels: “Bern must not accept this.” According to Schneider-Ammann, Switzerland does not need this “unbalanced draft” at all, because “the movement of people and goods between the EU and Switzerland is impressive in international comparison and still strongly in favour of the EU. […] No other European country, including the EU member states, is demographically and economically better integrated into Europe than Switzerland.” Schneider-Ammann concludes: “In summary, this means that Switzerland is not a takeover candidate. We are scientifically and economically fit and, thanks to good relations between the social partners, we have social peace. We do not need to join the EU, nor do we need to be prepared for it with an unbalanced InstA”.
  In a similar vein, the chief economist of the Federation of Trade Unions, Daniel Lampart, argues: “The reality is that in many cases the EU benefits more from its ties with Switzerland or that Switzerland has adapted many regulations in favour of the EU. […] No other country in Europe has as many foreign service providers as Switzerland (measured by the resident population). Conversely, there are hardly any Swiss companies that go abroad. [...] Switzerland has a deficit with the EU in both goods and services (tourism, banking, insurance, etc.). This deficit is likely to become even larger with Brexit.”5

CVP party officials go one step further: Better a terrible end …

The statement made by former Federal Councillor Schneider-Ammann made many politicians and association leaders speak out who until then had not made such a clear statement. Already on the evening of voting day (27 September), the editors of the “Neue Zürcher Zeitung” had to admit: “How an agreement with Brussels can still be reached is a mystery. Parties, trade unions and industry are defining rigorous conditions.”6
  On this evening, Council of States member Pirmin Bischof (CVP Solothurn) took the following position: “We also need improvements in the issues relevant to sovereignty policy [adoption of legislation, guillotine clause, ECJ], otherwise the treaty will fail in the referendum if not before.” Especially the direct influence of the ECJ on legislation and jurisdiction in Switzerland “is difficult to reconcile with our direct democratic and federalist system”. On 25 September, Bischof had already submitted an interpellation with a series of concrete questions to the Federal Council (interpellation 20.4255 “Institutional Framework Agreement. Adjust it now”). For example: “What is the procedure if the EU rejects substantial Swiss requests?” Bischof’s own answer to this: In this case, it would be better for the Federal Council to terminate the negotiations itself.7
  On 28 September, CVP President Gerhard Pfister also intervened, warning, among other things, that it should not be allowed for a biased European court to decide on the relationship between the EU and a non-member.8
  A further surprise – and rightly so! – the warning of the editor-in-chief of the SonntagsZeitung (“Tages-Anzeiger”), Arthur Rutishauser: if the EU was willing to compromise on the three points at issue (protection of wages, Citizens Right Directive, state subsidies), “the Federal Council would not really have much choice but to sign”. But there were also the fundamental questions of dispute settlement and the guillotine clause [...]. “From the Swiss point of view, signing such a clause would simply be stupid.”9

SP party leadership: “EU euphoria has almost disappeared”

Let us look at the statements made by the Social Democratic Party. In their party agenda, Swiss accession to the EU remains a goal to be pursued. It is therefore very encouraging to hear the clear words of former party chairman, Council of States member Christian Levrat, and the new co-chairman, National Councillor Cédric Wermuth, who took office on 17 October. Cédric Wermuth: “We want to advance European integration of Switzerland. But it isn‘t our task to save this failed treaty at any price.”10 Christian Levrat says it even more clearly: “A breaking-off is not the end of the world. Negotiating is always associated with the option of failure”. Levrat adds: “The EU euphoria that prevailed at my beginnings has almost disappeared, even in the SP. We’re interested in a strong and successful EU. But obviously, there is currently no ground for further steps towards rapprochement. This is understandable. The EU is no more as progressive as we are in the social field.”11 [emphasis mw].

Swiss Confederation of Trade Unions: ECJ places freedom of corporations above the protection of workers

Daniel Lampart, head of the secretariat and chief economist of the Swiss Confederation of Trade Unions (SGB), uses the example of Swiss wage protection to explain what the concrete meaning of Switzerland’s subordination to the jurisdiction of the European Court of Justice would be. If Switzerland had to adopt the EU Posting of Workers Directive, the ECJ would assess whether Swiss wage protection is proportionate according to the meaning of this directive. However, according to Daniel Lampart, the ECJ doesn’t primarily want to protect the interests of employees, but rather to enforce the “four basic freedoms” for corporations: “In various rulings since 2007, the ECJ has repeatedly concluded that wage and employee protection provisions are contrary to the internal market, and it has regularly placed the freedom of the employer to offer his services above the right of employees to be protected in their rights”.12 And this is the court to which we should subject our affairs?
  In the same statement, the SGB clearly points out that the Swiss way of ensuring that working conditions and wages are respected does not fit into the EU pattern. For in our country the social partners themselves carry out the controls, not the state authorities – in the spirit of the direct democratic Swiss state structure based on mutual trust. Such a thing is unthinkable for Brussels bureaucracy. In Switzerland, the minimum standards are laid down in collective agreements, according to the SGB: “Compliance with these standards is monitored by joint commissions of employers and trade unions and enforced by means of sanctions (contractual penalties). This method of enforcement is unique in Europe. There’s a very great danger that the EU Commission or the ECJ would forbid Switzerland to do so in whole or in part.”

Social partners stand united in their criticism of the Framework Agreement

The head of the Swiss trade association Economiesuisse has for years been unequivocally in favour of signing the framework agreement because it creates “a stable and sustainable basis” for economic relations with the EU (economiesuisse.ch: Institutional Agreement Switzerland-EU). Economiesuisse is strongly supported by the think tank Avenir Suisse. Both are primarily concerned with a “stable basis” for the globalised large corporations and are less interested in preserving the Swiss state model and the concerns of the social partners in companies. According to the Federal Statistical Office, however, SMEs (with fewer than 250 employees) account for over 99% of Swiss companies, namely (in 2018) 591,016 firms with more than 3 million employees! This makes it all the more gratifying that other exponents of the Swiss economy have recently also taken the floor.
  Only recently it became known that the Swiss Employers’ Association (Schweizerischer Arbeitgeberverband, SAV), the Swiss Trade Association (Schweizerischer Gewerbeverband, SGV), the Swiss Federation of Trade Unions (Schweizerischer Gewerkschaftsbund, SGB) and the umbrella trade union federation Travail.Suisse addressed a joint letter to the Federal Council on 14 August 2020.13 These four weighty umbrella organisations of the social partners are proposing various solutions. These range from the mere exclusion of the three “elements considered to be incapable of winning a majority in domestic politics” to the exclusion of the entire Agreement on the Free Movement of Persons (which was only just defended tooth and nail by the EU turbo-speeders up to the vote on 27 September!) and a model with a classical bilateral mechanism of dispute settlement (i. e. without ECJ power of decision).
  It is also interesting to note that the Framework Agreement “is likely to be subject to a mandatory referendum and will therefore require both a popular majority and a majority of the cantons”. [emphasis added] The Federal Council has so far given this question a wide berth. However, in view of the fact that the similarly far-reaching EEA proposal was made subject to a compulsory referendum, the answer is clear under constitutional law.

At last a non-partisan business network against the Framework Agreement!

The three entrepreneurs Urs Wietlisbach, Alfred Gantner and Marcel Erni, owners of the successful financial company Partners Group in Baar (Canton Zug), are in the process of building up an entrepreneurial network with hundreds of entrepreneurs who want to breast the Framework Agreement with the EU. These three entrepreneurs stress that they have nothing to do with the SVP. It is regrettable that the tone in Swiss politics is often so sharp that it is necessary to dissociate yourselves from others – but it is nevertheless gratifying that, in addition to the SVP, which has always been opposed to Switzerland’s closer integration into the EU, other groups of citizens and entrepreneurs are emerging who want to preserve Switzerland’s liberal and direct-democratic way. For there are numerous entrepreneurs in Switzerland, such as former Federal Councillor Johann Niklaus Schneider-Ammann (who previously ran a company in the engineering industry for decades), for whom Swiss sovereignty comes first.
  The entrepreneurs of Partners Group say that Switzerland needs good relations with the EU. But with the dynamic adoption of EU law, the Framework Agreement “endangers federalism and the core of direct democracy”. After all, the right of initiative and referendum would effectively be abolished: If in the future someone wanted to take the referendum against a further legal development of the EU, “it would be said that this would cost too much in the context of the EU’s retaliatory measures”.14 Alfred Gantner emphasises that economiesuisse and the think tank Avenir Suisse “certainly do not represent the concerns of Switzerland, but those of the multinationals”. For him, a future for Switzerland on the basis of the Framework Agreement is “not the development I would like to see for my grandchildren. Any state which automatically adopts foreign law gives up being a state”.
  Gantner points out that there are good reasons against the agreement for both left and right. The trade unions’ concerns are justified: “If we automatically adopt European law, we can no longer keep under control all the neo-liberal ideas inflowing from Europe. For labour law, for example, this would not be good at all”.

Synopsis

When we read the statements made from the various political perspectives and by management as well as labour, and when we then combine them intellectually, we can only rejoice: at the down-to-earthness, the sense of democracy, the taken-for-grantedness that for the Swiss people, our understanding of the state is not subject to negotiations. The Bernese negotiators, but also the authorities themselves, may well act a little more confidently. Instead of being cowed by the Brussels bureaucrats or trying to curry favour with them, they could try to give them a better understanding of the Swiss state.
  Finally, let me present three Swiss who draw the line from their own point of view to the ensemble:
  Carl Baudenbacher, former president of the Efta Court, says: “For about twenty years, a network of bilateral agreements has been in existence between Switzerland and the EU, administered by joint committees. In case of conflict, they sit down together and try to find a negotiated solution. It is undisputed on both sides that this cooperation is very successful. Nevertheless, the EU is trying to shift in its favour the balance that, in the opinion of both sides, has characterised bilateral relations up to now. […] The denial of stock market equivalence in the summer of 2019 was discriminatory, and the constant threats of economic and political disadvantages in the event that the InstA is not signed are unacceptable.”15
  SVP faction leader Thomas Aeschi: “Legal certainty will decrease because we can no longer define our law alone. We do not know what regulatory ideas the EU will come up with - and yet we commit ourselves to adopting everything. That is absurd.” “We can regulate much more cleverly with our political system which is closer to the people than a colossus like the EU with its backroom deals. Apart from that, the free movement of persons alone is about very sensitive areas such as the regulation of the labour market or access to social security. It would be absolutely negligent to make the EU the legislator here.”16
  Pierre-Yves Maillard, President of the Swiss Confederation of Trade Unions: “For us trade unions, it is crucial that we have binding exceptions in wage protection and public service. But politically, of course, the problem remains: In the other areas concerned, Switzerland would commit itself to always adopting EU law in principle. This is not about ‘foreign judges’, but about democracy. Such a construct would be very difficult to achieve in a referendum, especially since it would also require the majority of the cantons. Diplomatic circles have misjudged the mood among the people. The people basically want more democratic influence on their future, not less.”17 


1  von Burg, Denis. “Rahmenabkommen mit der EU. Der Bundesrat will einen neuen Unterhändler nach Brüssel schicken” (Framework Agreement with the EU. The Federal Council wants to send a new negotiator to Brussels), in: SonntagsZeitung of 11 October 2020
2  von Burg, Denis; Aebi, Mischa. “Beziehung Schweiz-EU. Immunisierung: So soll der Rahmenvertrag gerettet werden” (Switzerland-EU relationship. Immunisation: How to save the framework agreement), in: SonntagsZeitung of 3 October 2020
3  See for the following: Schneider-Ammann, Johann Niklaus (Gastkommentar). “Rahmenabkommen: Drei Klarstellungen reichen nicht aus. Die Souveränitätsfrage muss angesprochen werden” (Framework Agreement: Three clarifications are not enough), in: Neue Zürcher Zeitung of 19 September 2020
4  “The Federal Council is a collegial authority, which means that all members of the Federal Council must represent its decisions externally, even if they personally disagree.” (eda.admin.ch. Federal Council)
5  Lampart, Daniel. Head of secretariate and chief economist of the Swiss Federation of Trade Unions. “Professionelles Verhandlungspowerplay der EU beim Rahmenabkommen – die Schweiz muss hier noch stark zulegen” (The EU’s professional power play in the framework agreement negotiations - Switzerland still has to make significant progress) of 3 October 2020
6  Schäfer, Fabian. “Die Bilateralen sind vorerst gerettet, aber für den Rahmenvertrag sieht es schlechter aus denn je” (The bilateral agreements have been saved for the time being, while things look worse than ever for the framework agreement), NZZ online of 27 September 2020
7  Schäfer, Fabian. “Die Bilateralen sind vorerst gerettet, aber für den Rahmenvertrag sieht es schlechter aus denn je” (The bilateral agreements have been saved for the time being, while things look worse than ever for the framework agreement), NZZ online of 27 September 2020
8  Birrer, Raphaela; Fellmann, Fabian. Interview mit Gerhard Pfister. “Gopfriedstutz, dafür sind die Bundesräte doch gewählt!” (Gopfriedstutz, that’s what the Federal Councillors are elected for!), in: Tages-Anzeiger of 28 September 2020
9  Rutishauser, Arthur. “Streit ums Rahmenabkommen. Der Bundesrat sitzt in der Europafalle” (Dispute over the Framework Agreement. The Federal Council is caught in the Europe trap), in: Sonntags-Zeitung of 4 October 2020
10 Schäfer, Fabian. “Die Bilateralen sind vorerst gerettet, aber für den Rahmenvertrag sieht es schlechter aus denn je” (The bilateral agreements have been saved for the time being, while things look worse than ever for the framework agreement), NZZ online of 27 September 2020
11 Friedli, Daniel; Kučera, Andrea. “Christian Levrat: ‘Die EU-Euphorie ist weitgehend verflogen, auch in der SP’” (Christian Levrat: ‘The EU euphoria has largely evaporated, even in the SP’), in: NZZ am Sonntag of 4 October 2020
12 “Rahmenabkommen und Flam: Die Position des SGB” (Framework Agreement and Flam: The Position of the SGB) of 23 September 2020. “Das vorliegende Rahmenabkommen ist eine Gefahr für Löhne und Arbeitsplätze” (The present framework agreement is a threat to wages and jobs)
13sgv(f)usam 6BIUSS-RTR
14 von Matt, Othmar. “Neue Attacke gegen das Rahmenabkommen: Milliardenschwere Unternehmer nehmen den Kampf auf” (New attack on the Framework Agreement: Billionaire entrepreneurs take up the fight), in: Luzerner Zeitung of 7 October 2020
15 Andenas, Mads; Baudenbacher, Carl. “Das InstA – ein ‘EWR des armen Mannes’ (The InstA - a poor man’s EEA). Guest commentary in the Neue Zürcher Zeitung of 12 October 2020
16 Interview by Fabian Schäfer with Thomas Aeschi, fraction leader of the Swiss People’s Party. “Vermutlich wird die EU uns mit schwammigen Zusatzerklärungen abspeisen.” (The EU will probably fob us off with vague supplementary statements), in: Neue Zürcher Zeitung of 14 October 2020
17 Interview by Fabian Schäfer with Pierre-Yves Maillard, President of the Swiss Federation of Trade Unions. “Es geht hier um Demokratie” (Here it is all about democracy”), in: Neue Zürcher Zeitung of 14 October 2020

Alternatives to the Framework Agreement

  • Suspend negotiations until the end of the brexite negotiations: “Negative reactions from the EU are foreseeable”, said Council of States member Pirmin Bischof. But it is probably interested in stable relations with Switzerland for purely economic reasons. “After the brexite negotiations, the EU can probably talk to us again in a more open, objective and non-ideological way”. (Council of States member Pirmin Bischof, CVP)
  • Interim Agreement: “This would confirm Switzerland’s will to support the EU with a generous contribution to cohesion, and Bern and Brussels would within the course of the daily business continue the process of updating the Treaties”. (former Federal Councillor Johann Niklaus Schneider-Ammann)
  • “Plan B would probably be a return to the old situation: individual bilateral agreements are developed where there is mutual interest. That is not optimal, and it is not my preferred scenario. But it would not be a drama either.” (resigned SP president Christian Levrat)
  • Generous cohesion payments for the absence of needlesticks: Switzerland could participate in the EU’s Corona Reconstruction Fund with “a contribution that would go well beyond its current cohesion payments. In return, the EU would have to refrain from punishing Switzerland with pinpricks for the failure of the framework agreement”. (SP Co-President Cédric Wermuth)
  • “Actually, we have no problems with the EU; Switzerland implements many of the guidelines from Brussels more dutifully than some member states. If, after the failure of the negotiations, the EU were nevertheless to harass us as it had threatened to do, this would be a violation of the principle of good faith in the Bilateral Agreements I, which is enshrined in international law. But it would be bearable. I know from good sources that the Swiss Confederation is prepared for such a case. Several departments have drawn up a list of countermeasures that Switzerland could take”. (SVP parliamentary fraction leader Thomas Aeschi)
  • Switzerland as a true and solidary partner of the EU: “It should make its financial contributions and cohesion payments. Not because we are being punished. But because we want to be a genuine partner of the EU in solidarity […]. But we do not want to automatically adopt EU law”. (Entrepreneurial initiative of the Partners Group)

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