“The EFTA Court” has nothing to do with EFTA

by Dr iur. Marianne Wüthrich

Switzerland is a thorn in the EU's flesh. Unlike with the many member states in which citizens have no say, the basic principles of Swiss politics are determined by the voters. Without direct democracy, our country would have long since become an EU member. For the first time in 1992 did the Swiss people refuse to join the European Economic Area (EEA) (with 50.3% of the votes and with 16 out of 23 cantons); next they said No to the federal popular initiative "Yes to Europe" in 2001, that is to say No to EU membership (with 76.8% of the votes and all cantons). For many Europeans, the Swiss model is a prototype: Actually, every nation should be given the freedom to determine their own position in the world.
Unsurprisingly for many Swiss citizens, the bilateral agreements with the EU turned out to be what they actually were: agreements between states that could be re-negotiated in good faith in case the fundamentals would be significantly changed. Hence the agreement on the free movement of people resulted in a migration to an extent that no other country in Europe has ever experienced.1 Therefore, the Swiss decided on 9 February 2014 that the federal authorities themselves should once again regulate migration from the EU states by fixing maximum numbers and quotas; if necessary, the Free Movement of Persons Agreement should be re-negotiated. – No more and no less.
Reactions were remarkable (we decided to ignore the unskilled outbreaks in domestic and foreign media). EU leaders repeated for the umpteenth time: "The free movement of persons is not negotiable." In Switzerland, political parties whose party programs had included the EU membership for years, are suddenly pledging themselves to the "continuation of the bilateral approach." A group of EU membership proponents filed the Rasa-initiative “Raus aus der Sackgasse” (Out of the impasse) a few days ago which requires the deletion of the Immigration Article 121 a of the Federal Constitution, because its implementation allegedly endangers the contents of the bilateral agreements. (One could almost haved the heretical idea that this action was coordinated with the federal administration ...)

The Federal Council – having received the order from the sovereign to concretise the immigration act within three years and, where appropriate, re-negotiate the Free Movement of Persons Agreement – claimed a few months ago, this issue could only be negotiated in connection with an Institutional Framework Agreement with the EU – which the Council would have liked to forward long ago. A few weeks ago we discussed the very farreaching intervention of such an agreement with regard to the sovereignty of Switzerland in this paper.2

Crux of the Institutional Framework Agreement: The foreign judges

The conclusion of an institutional framework agreement between Switzerland and the EU includes the recognition of an EU Court as the highest judicial body which would determine the interpretation of existing or future bilateral agreements. This very idea makes our hair curl. Yes, the Federal Council had to fear definitely that the whole package it had planned would go down the drain by the referendum beause of this crucial point. “No foreign judges” – this corresponds to the concept of freedom and independence, which has always been indispensable to the Swiss people.
Being aware of this, the Federal Council made a laudable attempt – albeit doomed to fail from the outset – to win the EU over to consent to a special construct: it was a mix between EU Justice and the model of bilateral agreements with its Joint Committees. Thereafter, the Supreme Court of the EU, the (European Court of Justice) ECJ, at the request of a party should not deliver a binding judgment concerning the interpretation of EU law but merely give an expert opinion. How this interpretation should be implemented in Swiss law would then be discussed in the Joint Committee (among representatives of Switzerland and the EU).
We could have bet that the EU would not agree to such a – relatively liberal – concept that maintained a small part of sovereignty for the contractor Switzerland! The ECJ rulings have to be binding, end of story.

“The EFTA Court – the little brother of the ECJ” (Carl Baudenbacher)3

As early as 5 years ago EFTA Court President Carl Baudenbacher brought his court into play and campaigned for the EEA accession of Switzerland.4 Recently, Christa Tobler, Professor at the Institute for European Global Studies, University of Basel blew into the same horn, “For the institutional issues the EEA model would be more suitable for Switzerland than the model of the unilateral invoking of the ECJ.”5
Now, after the sobering results of the negotiations with the EU as to the resolution of disputes under a framework agreement, we hear amazing tones in the daily press about the “little brother of the ECJ”: There is a talk of an “EFTA solution” or “EFTA model”. Indeed, an otherwise well-known conscientious politician, who credibly had assured that she would never seek an EU membership of Switzerland and certainly no subordination under ECJ judiciary, is quoted with the words, that the EFTA solution had several advantages which could easily be imparted to the voters (!): There would be no foreign judges, since it did not concern an institution of the EU and a Swiss judge would be part of it. – Unfortunately, this statement is absolutely untrue. And she continued: The strategic goal behind the Framework Agreement was the conservation of bilateral agreements, and in order to achieve this, EFTA was more suitable than the EU institutions because of its manner of operation and because Switzerland was a member of EFTA.6
Now, dear journalists and readers, dear politicians: Let us hope that it was not on purpose that the truth was sacrificed to this strategic goal – at least not by the cited councillor. Whoever wants to know the truth, but so far has not found the time to look for it, is kindly requested to read on. The following corrections are one and all literal statements of Carl Baudenbacher, in his capacity as President of the EFTA Court – and he must know it!

1st Correction: The EFTA Court has nothing to do with the EFTA.

The EFTA Court was established by the EU (!) after the accession of the three EFTA member states Norway, Iceland and Liechtenstein to the EEA in order to ensure the uniform application of EU law in these three countries: “The EFTA Court in Luxembourg that has existed since 1 January 1994 is in charge of case law, which has its origin in the EFTA pillar of the European Economic Area (EEA)”.7 The name EFTA Court is therefore incorrect and misleading. The EFTA Court is in reality an EU Court. The EU established it for the three EEA countries which were not members of the EU simultaneously and are therefore not incorporated in the EU’s judicial system.

2nd Correction: The EFTA Court was installed by the EU to monitor the application of EU law in the three new EEA countries.

The EFTA Court “is mainly competent to deal with infringement suits raised by the EFTA Surveillance Authority (ESA) against one of the three EFTA pillars (Norway, Iceland and Liechtenstein) concerning violations of the EEA agreement, for rendering preliminary rulings of national courts in these three countries and actions for nullity on the interpretation of EEA law in competition law and state aid law matters in the three mentioned countries.”8
Therefore Court President Baudenbacher called the EFTA Court the “little brother of the ECJ”. The second monitoring body, the ESA, does not only monitor the EFTA, but watches over the three EEA EFTA states’ “correct” application and implementation of EU legislation.

3rd Correction: EEA law is identical in content with EU law – the EFTA Court follows the relevant case law of the ECJ.

“The EEA law, effective in the EFTA pillar, is derived from EU law. […] EEA law is essentially identical in substance with EU law. The uniform (‘homogeneous’) interpretation of its rules is guaranteed by special homogeneity rules. According to these rules the EFTA Court is bound to follow the relevant case law of the ECJ”.9

4th Correction: “The ESA and the EFTA Court are parallel institutions to the EU Commission and the European Court of Justice [...]” (Carl Baudenbacher).10

This means that the EFTA Court rules on complaints by the EFTA Surveillance Authority (ESA) against one of the three countries (Norway, Iceland and Liechtenstein), for example, because of an alleged breach of the EEA Agreement. (The parallel: The ECJ rules on actions of the European Commission against one of the EU member states because of an alleged violation of EU law.)
Everything all right? ESA and the EFTA Court have been created solely for the purpose, to impose EU law on the three EEA countries Norway, Iceland and Liechtenstein. It is of the EFTA Court’s behalf to make its case law “identical in content” to ECJ case law. A “little brother” who must do what Big Brother tells him.

5th Correction: No foreign judges?

The EFTA Court consists of three regular judges, one for each member state, i.e. a Norwegian, an Icelander and the Swiss Carl Baudenbacher, who represents Liechtenstein. If Switzerland submitted to the EFTA Court as a final arbiter on contentious issues concerning the bilateral agreements, it could probably also send a judge. But:
A court whose job consists only of controlling the application of EU law in the participating states and following the ECJ’s decisions, is and will remain an EU court, a “foreign judge” – even if one of the judges has a Swiss passport.

Massive loss of sovereignty for the EEA countries as a result of the jurisprudence of the “EFTA Court”

Loss of sovereignty – example Norway

“More Norwegian freedom of action and less control by the EU: Over the last 20 years the EEA has been increasingly expanded and is now touching policies, which the then parliamentary majority of supporters declared to be beyond the EEA. Examples are the Norwegian regional policy, the petroleum policy, the management of natural resources and the alcohol policy. For several years, rights and measures to prevent social dumping, were questioned by the supervisory authorities of the EEA, ESA and the EFTA Court.”11

Loss of sovereignty qualified by judicial dialogue?

According to Baudenbacher the loss of sovereignty of the EEA EFTA States will be qualified by the permanent judicial dialogue between the EFTA Court and the ECJ: “Of course, the ECJ’s case sets the tone. The EFTA Court has often delivered decisive input for its case-law.”12
No wonder Norway mourns the loss of sovereignty, which it has suffered since joining the EEA. The fact that Mr Baudenbacher conversed with the judges of the ECJ on the telephone and the latter graciously accept an “input” now and then, is certainly not what the Norwegians and of course democracy-used Swiss understand by sovereignty.

Pseudo participation rights as cover

According to Baudenbacher EEA/EFTA states have “no right to co-determination” when new laws are established, however, they have “more extended participation rights than Switzerland when drafting new EU legislation.”13
Baudenbacher does not substantiate these participation rights. Just imagine how little even the EU Member States have to say in establishing new EU law (as for example in the issue of the euro rescue packages in the ESM)!

Step by step: first EEA accession, then full EU membership

In reality, Carl Baudenbacher does not want Switzerland to join the EEA, but the EU, which, however, will only be possible by making use of salami tactics. “The political disadvantages of the new bilateralism, especially the ongoing and increasing loss of sovereignty and the isolation, could be best compensated by joining the European Union. However, there is a complete lack of political conditions for such a proceeding. So we should proceed step by step.” – ” Switzerland should venture a second EEA-attempt. […] If the Federal Council would launch an EEA II project, the error of 1992, when we presented an application for the EU membership simultaneously with the settlement of the EEA negotiations, should not be repeated. That does not change the fact that EU membership will be inevitable in the long term.”14

First Conclusion: EEA model or Institutional Framework Agreement? Neither nor!

A closer look at the Framework Agreement and the EEA model necessarily lead to the conclusion: Both models would be the end of sovereign and direct-democratic Switzerland.
We would do better with bilateral agreements with the EU – but real agreements on an equal footing, not unilateral dictation by a great power imposed on a small state! The Swiss sovereign’s wish to re-negotiate, for example, the Free Movement of Persons Agreement due to the unexpected high immigration rates should be realisable between civilised contractors. Considering the large quantities of the acquis communautaire (EU law), that Switzerland has already adopted as federal law by the so-called “autonomous reenactment”, it would be nothing but decent if the EU took a bit from the acquis Suisse from time to time as well, wouldn’t it? And: Since the existing Bilateral Agreements have already led to all kinds of – sometimes very serious – problems, we should refrain from adding some more.

Second Conclusion: Why not fill the EFTA with new life?

We Swiss have always maintained intense cultural, legal and economic relations with the entire world, but especially with other countries in Europe since our country is situated in its center. Out of the desire to co-operate with other European countries, Switzerland was actively involved in the establishment of the European Free Trade Association EFTA in 1960 – an association of sovereign nation-states, which still exists today. The EFTA offers itself as a viable alternative for European states that no longer feel in good hands in the EU.
By the way, many EU countries were EFTA members once, before they embarked on a path that has led them away from the Europe of nations. In addition to the present four EFTA states Switzerland, Iceland, Liechtenstein and Norway, there were Denmark, Great Britain, Austria, Portugal, Sweden and Finland as members of the EFTA over a shorter or longer period of time. Why not fill EFTA with new life?     •

1    “Since 2007, the average of the annual growth rate is more than 1%. 2014 registered a rate of 1,2% and that makes Switzerland one of the most dynamic countries according to the population growth in Europe.” Swiss Federal Statistical Office, www.bfs.admin.ch/bfs/portal/en/index/themen/01/02/blank/key/bevoelkerungsstand.htmlnd Bevölkerungswachstum (as of 9.11.2015)
2    “Wanted: Representatives who are not casting one eye at Brussels”, Current Concerns No 25 of 6 Oct. 2015
3    “Der EFTA-Gerichtshof – der kleine Bruder des EuGH” by Carl Baudenbacher, in: “prisma 341 – Weg” of 15.10.2012;© 2013 by prisma, St.Gallen (Switzerland) /Amiado Group AG, Zurich (Switzerland); see also http://carlbaudenbacher.com/profile
4    Carl Baudenbacher, “Rechtsprechung: Rechtssicherheit als Standortfaktor”, in “Souveränität als Härtetest” ed. by avenir suisse and Verlag Neue Zürcher Zeitung, Zurich 2010, p. 272f. [emphasis by Current Concerns]
5        Neue Zürcher Zeitung from 23.10.2015
6    cf. “Was ist machbar?” commentary by guest writer Christa Tobler, Neue Zürcher Zeitung from 18.9.2015; see also “Würde ein Rahmenabkommen in die EU führen?” of the former ambassador Carlo Jagmetti, Neue Zürcher Zeitung from 6.10.2015
7    Baudenbacher, “Der EFTA-Gerichtshof” ibid.
8    Baudenbacher, “Der EFTA-Gerichtshof” ibid.
9    Baudenbacher, “Der EFTA-Gerichtshof” ibid.
10    Baudenbacher, “Der EFTA-Gerichtshof” ibid.
11    “EWR-Diskussionen in Norwegen” in Europa-Magazin from 25.2.2013, Copyright 1996–2013 Forum für direkte Demokratie, edit.europa-magazin.ch/zone/.3bb68aba]
12    Baudenbacher, “Rechtsprechung: Rechtssicherheit als Standortfaktor”, ibid. p. 259
13    Baudenbacher, “Rechtsprechung: Rechtssicherheit als Standortfaktor”, ibid. p. 271 and 259 [emphasis by Current Concerns]
14    Baudenbacher, “Rechtsprechung: Rechtssicherheit als Standortfaktor”, ibid. pp. 272. [emphasis by Current Concerns]