Switzerland in Europe and the world

News from Parliament and the Federal Council

by Dr iur. Marianne Wüthrich

On 1 October, the three-week autumn session of the Swiss Parliament came to an end. Among many other topics, the National Council and the Council of States once again dealt with the cohesion payments demanded by Brussels. The Council of States also dealt with the question of whether the free trade agreement with the Mercosur states – the wording of which is not even known to parliament – should be subject to an optional referendum.
  Meanwhile, Switzerland’s new contact person in Brussels, Maroš Šefčovič, did not exactly present himself as an equal partner. The President of the Swiss Confederation, Guy Parmelin, and the head of the FDFA, Ignazio Cassis, were in New York for the 76th UN General Assembly, where the former gave a fitting rebuttal to the Brussels proposals. But there are also statements on Switzerland-EU relations from democratically-minded politicians from our neighbouring countries.
  In New York, Federal Councillor Cassis campaigned for Switzerland’s candidacy for a seat on the UN Security Council, which is questionable from the point of view of neutrality. However, the two Federal Councillors also performed Switzerland’s actual tasks in the world by offering humanitarian assistance or Good Offices to various countries.

This is a tour d’horizon of Swiss foreign policy in recent weeks.

Commission once again sets the tariff – President of the Confederation Guy Parmelin counters

The Slovak Vice-President of the EU Commission and new contact person, Maroš Šefčovič, got straight to the point: the institutional issues remain unchanged on the table for the EU, he explained. The EU needed a “dispute settlement mechanism” with Switzerland and a “forum to talk about state aid”. As soon as Switzerland was ready to settle these issues in a “substantive discussion”, he was ready.1
  At the very beginning of his new mandate, Šefčovič thus smoothly ignored the fact that the Federal Council had ended the negotiations on the Framework Agreement precisely because the anti-democratic demands from Brussels are incompatible with Switzerland’s understanding of the state.
  But what is most important to the EU Commission is apparently the money. After the second cohesion billion (which has since been released by the parliament in Bern), Switzerland, similar to the EEA states, would have to make regular payments in the billions as a “price” for participation in the EU’s internal market: “When you see what Norway is doing, you can understand that we expect the same from a country as prosperous as Switzerland”, said Maroš Šefčovič according to the “Tages-Anzeiger” of 22 September.
  The harsh manner of the EU Commissioner went down badly with the Swiss Federal President. We have to speak the same language, Guy Parmelin said from New York. If you want to compare Switzerland with Norway, you can only compare comparable things. “We have invested several [more than 20] billion francs in the New Rail Link through the Alps (NRLA), all by ourselves. Norway has not invested one franc in the NRLA.” As for the “price of participation in the EU internal market”, President Parmelin noted that the EU has an annual trade surplus with Switzerland in the billions. “All these aspects must be discussed as a whole and at the political level”, he said.2 

Cohesion payments yes – but Brussels must abide by the law

In fact, the Federal Council has been willing to pay for a long time. In August, it now called on parliament to quickly deblock the CHF 1.3 billion. It added: “At the same time, the Federal Council will continue to work to ensure that Switzerland is not discriminated against by the EU and is not treated differently from other third countries in equivalence procedures.”3 As previously outlined in Current Concerns, Parliament had already approved the funds in December 2019, but blocked the disbursement due to punitive measures taken by the EU against Switzerland in violation of the law and the treaty.4
  Now, after a lengthy tug-of-war with the Council of States, the National Council has made it possible for both chambers to vote on the release of the second cohesion contribution at the very end of the autumn session. In its press release of 17 August, the Foreign Affairs Committee of the Council of States had requested the release of the funds without conditions in order to “send a positive signal to the EU and take a first step towards de-escalation”. In order to prevent a hasty decision, however, the Council of States had put the item on the agenda for the second last day of the autumn session (i.e. the Council of States wanted the National Council to decide on it not until the winter session). On 27 September, however, the National Council decided by a narrow majority to put the cohesion billion under the roof this session (swissinfo.ch of 27 September 2021 / Keystone-SDA). Following the Council of States, it made its decision on Thursday evening (30 September).
  The result: The Council of States approved the release of the second cohesion contribution by 30 Yes to 9 No, the National Council by 131 Yes to 55 No. It is to be hoped that the EU Commission will appreciate this positive signal from Bern by ending its punitive measures that are contrary to treaties and international law.

Illegal attack by the EU Commission against the Swiss medtech industry – Switzerland’s sovereign response

So far, the Swiss in politics and business have skilfully handled the illegal and contrary to contract chicaneries from Brussels and have always entered the ring with a plan B, which works perfectly well. Switzerland has been organising and financing its participation in the Erasmus+ student exchange programme for years (and even much cheaper). The Federal Council has taken ingenious counter-measures to take advantage of the repudiation of the Swiss stock exchange as being equivalent to the EU’s stock exchanges (SRF News of 1 July 2019). The Federal Council recently decided on sophisticated “transitional measures until Switzerland’s intended association” for the Horizon Europe research programme, the financing of which it will submit to parliament in the winter session.5 
  One can understand the annoyance of the EU bureaucrats when the smart Swiss promptly put a spoke in their wheel. But the fact that they vent their anger with increasingly blatant breaches of law – that must be put to an end.
  The latest attack is on the Swiss medical technology industry. According to the German homepage medizin-und-technik.industrie.de, Switzerland is “one of the world’s most attractive and innovative medical technology locations and an important trading partner in the EU”. The medtech industry exports products for about 12 billion Swiss francs per year, half of them to the EU. Shortly after the Federal Council broke off negotiations on the framework agreement in May this year, the EU Commission declared that Swiss certificates for medical technology products would no longer be accepted in the EU. In doing so, it violated the “Agreement on the removal of technical barriers to trade”, which is part of the Bilateral I agreements. However, the shot backfired, because the medtech industry had expected this breach of law by the EU and had its plan B ready: Since May 2021, Swiss companies have been organising the certification of their products in the EU so that they can continue to export there in the future.
  So far, so good – one might think. Now, however, the EU Commission has used a sledgehammer. It announced that it also would no longer accept thousands of already certified products – retroactively!6
  That’s unbelievable! To add the non-compliance of the prohibition of retrospective legislation, which applies in every state under the rule of law, to the previous violations of right and contract – that is not possible at all! Anyone who has hoped for more legal certainty from Switzerland’s closer integration into the EU should become thoughtful. As the State Secretariat for Economic Affairs (SECO) has announced, Switzerland is now taking legal action: It is demanding the summoning of the mixed committee (the arbitration board provided for in the Bilateral Agreements), thus forcing the Brussels bureaucrats to the table.

Gratifying support from our neighbourhood

Fortunately, Switzerland and its qualities are highly appreciated, especially in our neighbouring countries. Many Europeans, for example, count on Swiss medical technology. Based on an expert opinion, the European Medtech industry association states that, the EU’s actions violate EU and WTO law in addition to the bilateral agreements. According to the Ministry of Economics, Labour and Tourism of Baden-Württemberg, the illegal non-recognition of Swiss products threatens supply bottlenecks in our neighbouring countries. Switzerland is the third most important market for Germany as to the import of medical technology, and it contributes significantly to emergency, trauma and diabetes care. Baden-Württemberg now wants to join forces with other German states as well as other EU states to “continue to ensure reliable supply chains and provision in the field of medical technology”.7
  Similarly, Austria’s Minister for Europe Karoline Edtstadler recently said at an EU meeting: “It is important for Austria that Switzerland remains on the agenda.” Switzerland is not only in the heart of Europe, but is also “a very important partner for Europe”.8
  The young Lukas Mandl from Lower Austria, member of the European parliament and there rapporteur for Switzerland, also proves himself to be a good neighbour. For him, it is “clear that not only Bern, but also Brussels is liable for the breakdown [of the negotiations on the Framework Agreement]. We have seen how it will not work. If we put the cart before the horse and then remain in entrenched positions, we will lose the plot”.9
  Lukas Mandl calls blocking Switzerland in the Horizon Europe research programme an “own goal for the EU”. Because: “Switzerland is the global leader in research. It would be important to have Switzerland there, as a shining example.” He does not envisage a relaunch of bilateral relations as a rehashing of the failed Framework Agreement, but rather as a permanent political dialogue: “This is also the wish of Federal Councillor Ignazio Cassis. Mutual understanding will only grow in the process.” Now the EU Parliament must “persuade the Commission to be flexible, so that this dialogue can become substantial and will not be stifled again in a narrow corset”.
  As rapporteur on Switzerland in the EU Parliament, Lukas Mandl is pleased that the Republic of Austria wants to raise the issue of Switzerland at the next EU summit, and he hopes for constructive contributions to the discussion, especially from our neighbouring countries: “After all, they are closer. But ultimately it should be clear to all member states that Switzerland is important as a valuable member of the European family of states.” For our part, we are pleased about this appreciation and happy to return it. •

1 Fellmann, Fabian; Israel, Stephan. “Kohäsionsbeitrag der Schweiz – Brüssel fordert schon die nächste Milliarde” (Switzerland’s cohesion contribution – Brussels is already demanding the next billion). In: Tages-Anzeiger of 22 September 2021
2 Washington, Oliver. “Die EU und die Schweiz – wer schuldet wem was?” (The EU and Switzerland – who owes what to whom?) Radio SRF, Echo der Zeit of 22 September 2021
3 “European policy: Federal Council refers dispatch on the release of the second Swiss contribution.” 21.050 Business of the Federal Council. Federal Council media release of 11 August 2021
4 “‘Horizon Europe’ and cohesion billion are two pairs of shoes”. In: Current Concerns of 17 August 2021
5 “’Horizon Europe’: Federal Council adopts transitional solutions for inaccessible parts of the programme for the attention of Parliament”. Federal Council press release of 17 September 2021
6 von Burg, Denis; Schmid, Adrian. “Nach dem Aus für den Rahmenvertrag – Die Schweiz setzt Brüssel unter Druck. Im Streit um die Anerkennung von Medtech-Produkten könnte Bern auch Hilfe aus den Nachbarländern bekommen” (After axing the framework agreement – Switzerland puts Brussels under pressure. In the dispute over the recognition of medtech products, Bern could also get help from neighbouring countries). In: SonntagsZeitung of 26 September 2021
7 von Burg, Denis; Schmid, Adrian. “Nach dem Aus für den Rahmenvertrag – Die Schweiz setzt Brüssel unter Druck. Im Streit um die Anerkennung von Medtech-Produkten könnte Bern auch Hilfe aus den Nachbarländern bekommen.” (After axing the framework agreement – Switzerland puts Brussels under pressure. In the dispute over the recognition of medtech products, Bern could also get help from neighbouring countries). In: SonntagsZeitung of 26 September 2021.
8 “Parmelin kontert Šefčovič. Neuer Ansprechpartner – Der neue Schweiz-Verantwortliche der EU-Kommission redet Klartext” (Parmelin counters Šefčovič. New contact person – The new Switzerland officer of the EU Commission talks plain language). In: SRF News of 21 September 2021
9 Israel, Stephan. “Interview mit EU-Abgeordnetem – ‘Ich halte es für völlig falsch, die Schweiz hinzuhalten’” (Interview with EU delegate – ‘I think it is completely wrong to stall Switzerland’”). In: Tages-Anzeiger of 23 September 2021

Seat on the Security Council or Good Offices – you can’t have it all

mw. On the occasion of his participation in the 76th UN General Assembly in New York Federal Councillor Ignazio Cassis declared in an interview with Radio SRF that Switzerland’s candidacy for a seat on the UN Security Council was “well on the way”. When asked whether he would see neutrality as a disadvantage or an advantage in this connection FDFA head Ignazio Cassis answered: “As an advantage. Neutrality is neither affected in a legal nor in a political term. Neutral states enjoy impartiality and can act as good bridge builders.”1
  As bridge builders? Ironically, in the UN Security Council? Switzerland really does have better opportunities in this world of wars and hardships! And how would Switzerland be supposed to show “impartiality” in the Security Council remains hazy. In any case, Federal Councillor Cassis wriggled around a clear answer to the following question from SRF-UN correspondent Fredy Gsteiger: “Will Switzerland often abstain from voting in the Security Council on problematic, sensitive votes?” What can you say to that? The long-standing Swiss ambassador Paul Widmer responded to this question some time ago: “Will Switzerland become an active member of the UN Security Council, it is no longer neutral. If, on the other hand, it is silent, it does not belong there.”2
  After all, Federal Councillors Cassis and Parmelin also used their stay at the UN to take care of the principal tasks of neutral Switzerland, the offer of Good Offices and humanitarian aid. For example, they met the Colombian President Iván Duque and remarked that Switzerland was making a “historic” contribution to the peace progress in Colombia and was helping the country economically as well. The Federal Councilor also spoke with the President of the Republic of Moldova, Maia Sandu, and explained that Switzerland was planning to support the country “economically and with education programmes”.3
  Let’s stick to it – neutral Switzerland can’t have it all.

1 Gsteiger, Fredy. “Schweizer Kandidatur für Uno-Sicherheitsrat ist auf guten Wegen” (Swiss candidature for UN Security Council is well on the way). Interview with Ignazio Cassis SRF Echo der Zeit of 21 September 2021
2 Widmer, Paul. “Lassen wir Malta doch den Vortritt im Sicherheitsrat!” (Let Malta go first in the Security Council!) in: NZZ am Sonntag of 16 September 2018. See also: Wüthrich, Marianne. “Big question mark on Federal Council foreign policy programme. What has neutral Switzerland got to do on the UN Security Council?” in: Current Concerns No. 15 of 22 July 2020
3 “Parmelin und Cassis an 76. Uno-Konferenz in New York.” (Parmelin and Cassis at the 76th UN General Assembly), Blick of 22 September 2021 (SDA/gbl)

Free trade agreement with Mercosur – subject to an optional referendum no ifs, no buts

On 20 September, the Council of States voted in a somewhat convoluted way that the free trade agreement between the EFTA member states (Switzerland, Norway, Liechtenstein and Iceland) and those of Mercosur (Argentina, Brazil, Paraguay and Uruguay) should be subject to an optional referendum. This means that the citizens, if they wish so, should have the last word.
  The main issue was the preliminary examination of an initiative by the canton of Neuenburg, which called on parliament “to examine whether it [the agreement] should not be subject to an optional referendum”.
  In its explanatory statement, the Grand Council (Parliament) of Neuenburg mainly states: “The watch-, pharmaceutical- and machine tool industries would benefit from Switzerland signing the agreement. For agriculture, on the other hand, this agreement would be problematic, as it could increase the competitive pressure on domestic agricultural production. According to Article 104 of the Federal Constitution, trade agreements must contribute to the sustainable development of the agricultural and food economy. But all indications are that this agreement will not contribute to sustainable development”. Moreover, the agreement has “only very weak control and sanction mechanisms” in the event of violations. The parliament of Neuenburg concludes that “for such an important agreement, it is crucial that the Swiss people can vote on it”.
  One can only agree with this view, and this is also what the Council of States did by – and this is where it gets convoluted – “not giving a follow-up” to the standing initiative because “the concern is already fulfilled”. This is because the Federal Council had “already assured” that in future all free trade agreements would be subject to an optional referendum, as was the case with the agreement with Indonesia. With its decision on the Neuchâtel cantonal initiative, the Council of States has thus fortunately expressed the view that in future all free trade agreements should be subject to an optional referendum.

Source: 20.316 Standesinitiative. “Für ein Referendum zum Freihandelsabkommen mit dem Mercosur”
(For a referendum on the free trade agreement with mercosura).
Debate in the Council of States, 20 September 2021 (SDA report)

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