A framework agreement with the EU, which is almost unknown to the public...

The previous history

by Dr rer. publ. Werner Wüthrich

Everyone is talking about the framework agreement with the EU, which is almost unknown to the public. Only “dynamic adoption of EU legislation” is to be left to us in future, and a new “arbitration tribunal” is to be set up. The Federal Council has been conducting negotiations with the EU since 2014, without disclosing the contents to the public. They have now agreed on a common policy and want to conclude the ongoing negotiations by the end of the year. – A look at the previous history will elucidate what the framework agreement will look like. It pays off to turn the pages back a good quarter of a century.

Federal Councillor Ernst Brugger was Federal Councillor from 1969 to 1978 and head of the Department of Economi Affairs. (Source and picture: Diplomatic Documents of Switzerland 1848–1975, http://dodis.ch/36209)

In 1981, a new stage was launched in the European Community EC. In France, the Socialist François Mitterand was elected president. Jacques Delors became his minister of economics and finance. After 1985, as president of the EC Commission, the latter initiated further concrete steps on the way to an “ever closer union”. Delors is considered the originator of the magic date “1992”, when the Maastricht Treaty was concluded and the cross-border internal market for persons, goods, services and capital created. In addition, there was a monetary union with the euro, but not everyone joined in.
At the beginning of 1989, Jacques Delors proposed a common European Economic Area (EEA) with common institutions to the remaining EFTA States Switzerland, Austria, Norway, Finland, Sweden and Iceland (Britain and Denmark had left the EFTA and joined the EC in 1973, and Portugal in 1986). This would allow them to participate to a large extent in the planned single market with the four freedoms. It was foreseen that in return, the EFTA countries would automatically have to take over large parts of EU law and also future changes – barring agriculture and taxes. An EEA Council at ministerial level was to be the bridge between the EC and EFTA. An EFTA Court was set up to oversee compliance with the EEA Agreement and to transfer European Court of Justice case-law to the EEA States. Genuine participation by the EEA member states was not intended. These arrangements would have considerably weakened direct democracy in Switzerland. The EFTA would only contribute advisory assistance with the preparation of new legal acts. Thus, the EEA differs fundamentally from the 1972 major free trade agreement between the EC and EFTA countries, which contained no political elements of this kind, and in which the contracting parties faced each other on an equal footing.

“The EU is currently building up its military forces aimed at Russia and involving its neutral member states Sweden, Finland and Austria more closely. This is another reason why Switzerland should keep its political distance. In Swiss polls, 90 per cent of the Swiss people regularly vote for adhering to neutrality.”

The Hauser report

Two years before the 1990 EEA vote in Switzerland, the Federal Council commissioned the St. Gallen economist Professor Heinz Hauser, head of the Foreign Economic Institute of the University of St. Gallen, to analyse the macroeconomic effects of the three European alternatives EEA, EC Accession and “going it alone”. The report was published in 1992, but did not reach the conclusions the Federal Council had wished for (Hauser 1992). While almost all economists at Swiss universities advocated the EEA or accession, Hauser expressed a differentiated opinion. He came to the conclusion that the free trade agreement of 1972 and Switzerland’s numerous supplementary treaties already ensured good market access, and that no far-reaching discrimination was to be expected. In addition, Swiss companies were already well represented in EC countries. The additional economic integration gain of EEA or even the EC accession would be low, and an active national solo-effort economically justifiable. Hauser understood this national solo-effort to mean the continuation of the bilateral policy under the Free Trade Agreement, and not to imply economic isolation.
According to Hauser, the EEA would mean that Switzerland would have to initiate significant liberalisation steps in some areas. This he would welcome. However, Switzerland might also voluntarily and autonomously initiate these steps in the aftermath of a “nay” to the EEA, (Lipp 2012, p. 104).

EEA vote of 1992

The EEA became an actual acid test in Switzerland. Three camps soon formed in politics, in the administration and also in the population. Some saw accession to the EEA as a middle course between EU accession and current policies based on the 1972 Free Trade Agreement. The negotiator Franz Blankart advocated this middle course. The head of the Department of Economics Jean Pascal Delamuraz and Federal Councillor Pierre Felber (FDFA) took a completely different position. For them, the EEA was an opportunity for a complete “opening” of Switzerland to “Europe” and a mere transitional solution, i.e. a stepping stone for a future EU accession. The third camp, which included National Councillor and SPP President Christoph Blocher as well as many others from all parties, rejected both the EEA and EU accession, and continued to advocate the preservation of sovereignty and cooperation with EU countries on an equal footing in the EFTA framework.
The “accession faction” in the Federal Council had been strengthened when Austria submitted an application for membership in 1989. Switzerland lost an important ally in the EFTA. At a historic meeting in the summer of 1992, the Federal Council was faced with the decision whether Switzerland should apply for membership, too. These events are well documented today. The vote was initially undecided – three to three, because Federal Councillor Adolf Ogi (SVP) was undecided and played off his potential to tip the scales. Finally, he opted for the application, in opposition to the position of his party. In a memorable appearance in the news, Ogi described the EEA as a “training camp” for EU accession. Shortly thereafter, the Federal Council deposited the application for membership in Brussels. This, however, aroused many voters who had seen the EEA as a mere further development of the Free Trade Agreement of 1972 and as an alternative to full membership.
Rarely had the feelings of the population been as heated as they were at that time. The economy was also divided. The Swiss Chamber of Commerce did recommend its members to vote “yes” but it also exercised restraint in the referendum campaign. Parliament had – for the first time in its history – approved a loan for “public enlightenment”, i.e. propaganda, for an aye to the EEA. Almost all media supported the aye campaign. The Federal Council itself got heavily involved in the voting campaign. But the opponents also made great efforts, because they saw sovereignty, independence and direct democracy in danger. National Councillor Christoph Blocher said: “The EEA is not a free trade agreement as we are made to believe; it is a treaty through which we cede very essential parts of our sovereignty. Everything else is whitewash. We would adopt foreign law to a large extent. We would also accept future law which is still unknown today.” (cf. Lipp 2012, p. 108)
On 6 December 1992, the people rejected the EEA Treaty with only 50.3 per  cent of the vote. But what was required was a majority of both the people and the cantons. With the cantons, the rejection was clear. In 18 of the cantons or demicantons, the voters had voted “nay” and only in 8 they had they said “aye”. Federal Councillor Delamuraz described the result as a “black day” in the history of Switzerland. Today the overwhelming majority of the population is probably of a different opinion.

“We must to be better so that we won’t have to join”

After the EEA-Nay, Parliament and the Federal Council decided to initiate comprehensive liberalisation measures “voluntarily and autonomously”, just as Hau-ser had advised. These steps had already been planned before the vote and had been undertaken under the name “Eurolex”. Now the motto of state secretary and EEA negotiator Franz Blankart applied: “We must be better so that we won’t have to join.”
The programme was now called Swisslex and was intended to “revitalise” the Swiss economy, which stagnated in the 1990s – as did the economy of other countries – , and in general to strengthen Switzerland as a business location in global competition. This procedure was closely related to the programme for a “market-based renewal”, which the Federal Council had already adopted in the 1980s. It was a comprehensive package of 22 measures. The core element was the revision and tightening of the antitrust law. Parallel to developments in the EU, parts of the public service – such as the Post Office and Telephony (PTT) – would be liberalised and privatised in the second half of the 1990s. Market-driven reforms were also to be implemented in the health, education and electricity sectors. In autumn 1993, just over a year after the EEA nay, Brussels signaled its willingness to engage in bilateral negotiations. This shows that the EU was definitely interested. For example, at that time the EU countries’ 40-ton trucks were still barred from crossing Switzerland.

“‘Switzerland should not pick cherries’ was – and still is – the standard argument. You practically never hear that Switzerland also has valuable “cherries” for the EU, such as the North-South connection for trucks and electricity and free immigration. In addition, Switzerland imports much more from the EU than it exports there, and it is a reliable economic partner.”

Accession as a strategic goal – a strange negotiation strategy

At almost the same time, on 29 November 1993, the Federal Council’s Report on Foreign Policy was published, in which its future strategy was outlined (Lipp 2012, p. 138). It stated that despite the EEA rejection, it remained committed to the goal of EU accession. That this was a strategic goal that could not be achieved directly. But this had consequences for the negotiating delegation. Franz Blankart, who had negotiated the EEA and continued to support it after its rejection in the negative people’s vote, was replaced as a negotiator by Jakob Kellenberger, who supported accession.
The negotiating delegation from Brussels was now in the comfortable position of negotiating with people who wished for future accession. People wishing to join do not represent dissenting positions; they are ready to accept the acquis communautaire in whole or in part, and they are also willing to subordinate themselves and to adapt their own legal system. It was the beginning of a Swiss foreign policy that was no longer geared primarily to benefit its own people, but became more and more concentrated on Brussels. It is not surprising that the “Jean Monnet for Europe” Foundation honoured all active participants in this scenario, i.e. the Federal Councillors Delamuraz and Felber, as well as Kellenberger, for their “Policy for Europe”. Jakob Kellenberger was even appointed Vice President of the Foundation.
This was unlike the years when Hans Schaffner, Paul Jolles, Albert Weitnauer, and others, prepared and negotiated the 1972 EFTA Free Trade Agreement with the EC. This was adopted by the people with over 70 per cent of the votes as well as in all cantons. It was thereafter repeatedly expanded and refined in over one hundred additional contracts, so that in 1992, in his report to the Federal Council, Professor Hauser was well able to establish that the additional economic integration gain of the EEA would be low (Lipp 2004, p. 104). This great, generally accepted free trade agreement of 1972 is the basis of Switzerland’s economic relations with the EU countries. It is conspicuous that it is barely mentioned in today’s debates on the framework agreement. Is a smoke screen wanted here to mask the fact that economic integration is largely given today and that the real goal pursued above all others is to integrate Switzerland politically? As early as in its Europe Interim Report of 1995, the Federal Council emphasised that bilateral treaties are aimed at facilitating our “full and comprehensive participation in the European integration process” (cf. Lipp 2012, p.139).
Today it is said that Switzerland needs a framework agreement to secure access to the single market. But will the EU really question something that has for decades worked well for both sides? – That is absurd. In addition, the EU benefits from a comfortable and cheap north-south connection for trucks and electricity, which it cannot do without and which is not given as a matter of course.
Without consulting the people
Now it often came to pass that in their media appearances, the Federal Councillors described the EU position to the people in as positive a way as possible (since they were willing to adopt it), and did not contrast it with a point of view of their own. “Switzerland should not pick cherries” was – and still is – the standard argument. You practically never hear that Switzerland also has valuable “cherries” for the EU, such as the North-South connection for trucks and electricity and free immigration. In addition, Switzerland imports much more from the EU than it exports there, and it is a reliable economic partner.

“This great, generally accepted free trade agreement of 1972 is the basis of Switzerland’s economic relations with the EU countries. It is conspicuous that it is barely mentioned in today’s debates on the framework agreement. Is a smoke screen wanted here to mask the fact that economic integration is largely given today and that the real goal pursued above all others is to integrate Switzerland politically?”

Without consulting the people

Now it often came to pass that in their media appearances, the Federal Councillors described the EU position to the people in as positive a way as possible (since they were willing to adopt it), and did not contrast it with a point of view of their own. “Switzerland should not pick cherries” was – and still is – the standard argument. You practically never hear that Switzerland also has valuable “cherries” for the EU, such as the North-South connection for trucks and electricity and free immigration. In addition, Switzerland imports much more from the EU than it exports there, and it is a reliable economic partner.

Change in political culture – farewell to the concordance

The people and above all the vast majority of the cantons had rejected the EEA in 1992. The Federal Council and large parts of Parliament (the “classe politique”) continued to stick to their goal of accession – supported by almost all the media. A large majority of the people remained skeptical. In 1997, it did reject the popular initiative “Negotiations concerning EU membership: Let the people decide!” In 2002, however, 81 per cent of the voters said a very clear “no” to a referendum calling for accession negotiations.
These political tensions inevitably had to have repercussions on elections. The composition of parliaments in the larger municipalities, the cantons and the federal government changed. The three big parties SP (Social Democrats), FDP (Free Democrats) and CVP (Christian People’s Party), all of which had included EU membership in their programmes, lost great numbers of voters in the following years. The Swiss People’s Party (SVP), which had strongly supported the 1992 People’s Nay and continued to support the Nay to accession, grew into a big party with about 30 per cent of the votes. The elite of the CVP had turned their backs on their down-to-earth, value-preserving constituencies most strongly, so that the party structure, which had been stable for many years, changed, most notably in the predominantly Catholic cantons. The number of CVP voters in Switzerland has since fallen throughout Switzerland from around 25 to under 15 per cent. The FDP has also changed. It has indeed removed accession from its programme, but political integration and accession are still an issue. The former FDP slogan “Solidarity where it is necessary and self-reliance where it is possible” is history.
The SP (which still has the EU accession in its party programme today) was a major party in the post-war period, and had about 30 per cent of the votes. Their voter turnout has dropped below twenty percent today. They have acquired a taste for the EU’s neoliberal, i.e. transnational and unified internal market and want to supplement it with accompanying measures. They have also warmed to the huge and expensive bureaucracy of 75,000 civil servants administering the member states in a “social-democratic” way, i.e. top down, close to the state, and internationalistically.
There are points of contact in the concept of the EU that explain the cooperation of SP and FDP since 1992 and today. Despite losses in the elections, the political influence of the three parties SP, CVP and FDP has remained dominant, because their elites repeatedly unite to form a so-called “Europe” alliance on important issues, which makes it more difficult or even impossible to keep up the proven concordance. This is the case again in the debate on the framework agreement.
This disastrous development reached its rock bottom when SVP Federal Councillor Christoph Blocher was deselected in 2007 – despite his successful departmental leadership. The political tensions persist even today, even though the CVP and the FDP have removed EU accession from their programmes, and the Federal Council is no longer officially pursuing its objective of accession and has recently withdrawn its request for accession, according to a Parliament decision. It is becoming more and more apparent that this is not about a single agreement or about the so-called “market access” – since that has been in existence for a long time already. It is about a change in political culture. The reason is that the basic concept of the EU is not compatible with the proven interaction between the Federal Council, Parliament and the people in direct democracy.

Vote booth and posters of the opponents to the EEA accession, November 1992. (picture keystone)

Bilateral agreements

After years of being subjected to a constant stream of claims that there is no alternative to the “Bilaterals”, the people finally agreed to the “Bilaterals I”, a package of seven EU-Swiss bilateral treaties, on 21 May 2000. The focus was on the free movement of persons and the admission of 40-ton trucks from EU countries. The free movement of persons had been inseparably linked with the other six agreements, so that it is still impossible to terminate it alone. In the meantime, most of the fears of the then opponents have been confirmed. They did not believe in the promises of the “Bundesrat”, that immigration would increase only slightly – to a maximum of around 8,000 people per year – and that trucks would later be transported by rail across the country. In 2004, the Bilateral Treaties II followed with the Schengen/Dublin Agreement. As immigration increased by hundreds of thousands, in 2014 the sovereign approved a popular initiative which wanted to again allow for management and control of immigration. The new constitutional article was, however, not implemented – on the grounds that it violates the agreement on the free movement of persons. So not only the parliamentary majority, but also the federal court, rates the Bilaterals or their political content higher than our own constitution – which is actually an unprecedented process. This “reorientation” is not accepted by the people. Signatures are being collected for a new popular initiative wanting to directly terminate the agreement on freedom of movement. The “Self-Determination Initiative” has already been submitted and will come to the vote. This is about emphasising to an even greater extent the fact that the Federal Constitution (apart from compelling international law) takes priority over international law – this was taken for granted until recently.

Framework agreement – a bleak scenario

For its part, for four years the EU has been insisting on a framework agreement which intends to incorporate Switzerland even more closely institutionally and thus politically, similar to what was already envisaged in the EEA. For example, the framework agreement includes the integration of Switzerland into the liberalised EU internal electricity market. This agreement, too, would have major consequences, as there are still more than 600 independent small and medium-sized electricity companies in Switzerland, most of which belong to the municipalities and cantons, and which provide the population with reliable electricity, within the meaning of public service. For them, there is definitely no place in the liberalised EU electricity market, because that is where boundless competition and globally active large corporations make the decisions. In addition, there is a risk that large-scale power plants built by previous generations in a joint effort, such as Grande Dixence in the canton of Valais, will be sold abroad. The EU’s market rules also require water rights concessions to be awarded across borders – which is completely at odds with the experience realm of the generations that built those many reservoirs and power plants, and which is also completely contrary to the idea of public service in Switzerland. – Like the framework agreement, so also the electricity agreement, which apparently has already been negotiated, would result in massive changes – not only in our political culture.
There are other reasons for restraint: Overall, the scenario is rather bleak. The EU is currently building up its military forces aimed at Russia and involving its neutral member states Sweden, Finland and Austria more closely. This is another reason why Switzerland should keep its political distance. In Swiss polls, 90 per cent of the Swiss people regularly vote for adhering to neutrality.
The EEA of 1992 was the reason for an increasing tension among the Swiss population and for the increasing misfiring of the well-proven interplay between the Federal Council, Parliament and the people, which is beginning to only work to a limited extent. One of the central causes for this is the dispute over the value and preservation of the country’s direct democracy and its independence, which are inevitably linked. Before 1992 there had been only a few examples in Swiss politics where the will of the people was so little respected – as has been the case from then on until today. This is propably the reason why significantly more popular initiatives have been adopted in recent years than before 1992.

European Union – rapprochement only under pressure?

Finally, let us look back at the previous history: In their political and forward-looking analyses in the run-up to the Free Trade Agreement of 1972, Federal Councillor Hans Schaffner and his co-workers had come to the conclusion that Brussels had to “outsmart” the populations of its member states to accept the new steps towards a political union constantly forced on them, and that such a “process of outsmarting was extraordinarily difficult” (dodis.ch/30358). – This is exactly what we are experiencing today in Brussels (where it is about a fiscal and debt union and also about military rearmament) as well as in Switzerland, which is to be politically more involved.
Walter Hallstein, the first president of the EEC Commission, spoke of the “power of the factual”, which would lead to an ever closer union. Jean Monnet also saw this in a similar way when he wrote: “Man accepts change only under the pressure of necessity.” Economic crises would serve as levers and allow for or force further political integration steps. In the EU these are the difficulties in the financial and monetary area. For Switzerland, this “economic crisis” is looming in the area of electricity supply, which is not secure for the longer term.
Federal Councillor Hans Schaffner and his coworkers were justifiably unconvinced of the value of this undemocratic policy in the run-up to the Free Trade Agreement of 1972, since Switzerland has no way of circumventing referendums, and the outcome of these must be respected.     •

Sources:

Hauser, Heinz; Bradke, Sven. EWR-Vertrag, EG-Beitritt, Alleingang. Wirtschaftliche Konsequenz für die Schweiz. Gutachten zu Handen des Bundesrates. (EEA Agreement, EC accession, solo action. Economic consequence for Switzerland. Expert reports for the attention of the Federal Council.) Zurich 1992

Lipp, Silvan. Standort Schweiz im Umbruch, Etappen der Wirtschaftspolitik im Zeichen der Wettbewerbsfähigkeit. (Switzerland in transition, stages of economic policy in terms of competitiveness.) Zurich 2012

Linder, Wolf. Handbuch der eidgenössischen Volksabstimmungen 1848–2007. (Manual of federal referendums 1848–2007.) Berne 2010