What does “the adoption of EU legislation”mean? Concrete examples

mw. With an institutional framework agreement, we would have to automatically adopt existing and future EU law and comply with the case law of the European Court of Justice (ECJ).

Here are two brand new examples.

The land transport agreement: EU wants to crack the ban on cabotage

According to the German dictionary “Duden”, “cabotage” means the transport of goods and persons within a state, for example from Aarau to Neuchâtel.
In the case of passenger transport, breaking the cabotage ban is already on the agenda: Foreign long-distance buses want to use their transit through Switzerland to pick up passengers in Zurich or Basel who will then get off in Lugano or Geneva – of course with a much cheaper ticket than that issued by the Swiss Federal Railways.
With regard to the transport of goods, cabotage is prohibited according to the land transport agreement with the EU, which makes part of the Bilateral Agreements I. This means that a Danish transport company may bring goods from Denmark to Switzerland, but the truck from Denmark is not allowed to take over transports from St. Gallen to Lausanne.
In its programme “Rendez-vous am Mittag (rendez-vous at noon)”, Radio SRF aired an alarming report on 3 May. “This is the Swiss camionneurs’ nightmare: Cheaper chauffeurs drive goods from A to B within Switzerland in foreign trucks. This direct competition from abroad is still forbidden. The so-called cabotage ban is anchored in the land transport agreement with the EU. But now there is increasing pressure to drop the ban. “[…] The pressure to loosen or even lift the ban on cabotage is indeed very great”, explains Minister of Transport Doris Leuthard: “It always comes back on the agenda in discussions with our European neighbours, but above all in discussions with Eastern European countries.”
If Ms Federal Councillor does not want this topic on the agenda, she can tell her foreign colleagues so. Instead, Leut­hard tries to confuse the radio listeners with contradictory statements. On the one hand, she admits:
“It has been established that in the past there were chauffeurs from Roumania, Bulgaria, on dumping wages who, for example, did not respect the rest periods.”
On the other hand, however, Ms Leut­hard is “ready to address the topic”:
She announces that cabotage […] will be discussed at the annual meeting of the International Transport Forum Leipzig at the end of May. The Swiss position is clear: Switzerland is ready to talk about the subject, but only if all transporters were to work under equal conditions.

Equal conditions? But how?

Should, by any chance, Roumanian employers pay their chauffeurs Swiss-level wages? Or will – more probably – Swiss truckers’ revenues plummet?
There are two sides to the matter, asserts Leuthard: Swiss companies would also be able to carry out transports within European countries. With Swiss wages in Bulgaria or in Spain?
What the affected companies and chauffeurs had to say about the “equal conditions” in the SRF broadcast of 3 May: “The Swiss Commercial Vehicle Association ASTAG and the Association of Public Transport VöV have presented a joint study today. This speaks of fatal consequences for the environment and for the Swiss modal shift policy, should the cabotage ban fall. ASTAG Central President, SVP National Councillor Adrian Amstutz: ‘Jobs would be lost to a considerable extent, and the transport companies would be forced to give up or to relocate abroad so as to operate in the Swiss market from there, with cheap Eastern chauffeurs.’ David Piras, secretary-general of the chauffeurs’ association “Les Routiers Suisses”, even fears the end of the Swiss transport industry as soon as foreign camionneurs would be admitted to Swiss domestic transport: ‘They would do it fast, be it because they build their base just behind the border, or directly in Switzerland. If that happens, then it will be quick. That hurts. So it scares us a lot.’”

Consequences for public transport

Also for public transport in Switzerland, the consequences would be de­vastating, warns the association’s director Ueli Stückelberger: “If long-distance buses from abroad were allowed to transport also inland passengers, there would be an extreme pressure on public transport prices; part of the clientele would move from today’s public transport to the foreign long-distance buses. And in freight transport there would be a certain shift back from rail to road.”
But Federal Councillor Leuthard just passes over the harsh objection of reality and announces that “uniform conditions, as we have them in other occupations are needed. So it will probably be difficult to prevent this” [the lifting of the cabotage ban; mw].
Well, it should be common knowledge that uniform conditions are hardly realistic for Slovak, Italian and Swiss carriers.
Meanwhile, the FDFA claims that the abolition of the ban on cabotage is not an issue in the current negotiations with Brussels.
What a good joke! The land transport agreement is in any case one of the market access agreements to which the framework contract is to apply. This means that, in three or four years’ time, the EU would be able to abolish the ban on cabotage within Switzerland with a new EU directive.
Neither the ECJ nor a so-called arbitral tribunal will protect us against such and other changes of law from above. We citizens must protect ourselves by saying no to the framework contract.

State aid – a rather intricate affair

Just over a year ago, the Federal Council mentioned in a press release that one of the questions raised in relation to the framework agreement was “state aid”.1 This remark led to loud rumblings in the press, as it became apparent that since the beginning of the negotiations in 2014, the EU Commission has been demanding that Switzerland must ensure “that the state does not distort competition if it wants to participate in the European internal market. That is why they should prohibit state aid”, or “apply it according to EU law”. This is a condition for the conclusion of an institutional framework agreement.2
In our country, the state aid in question would be, for example, the state guarantees for cantonal banks. Or federal subsidies for agriculture or for the energy supply. Or community contributions to a sports stadium. We citizens usually decide at the urn on these as well as on many other state contributions at the federal, cantonal and municipal level. However, under the Treaty on European Union, state aid is “incompatible with the internal market” (Article 107/108). In the EU member states, any planned state support must be reported to the EU Commission, which only grants it “if it is actually in the public interest, that is, serves society or the economy as a whole”.3 Rather an ambiguous definition …
Following the Federal Council’s announcement last summer, the KdK (Conference of Cantonal Governments) announced an investigation and for once proved to be a suitable representation of its members.
On 23 March 2018, the Plenary Assembly of the KdK took up a clear and distinct position.4 Here are some excerpts from the position paper:
“If Switzerland introduces a ban on state aid according to the standards of EU law, all state action is fundamentally subject to […] scrutiny. The ban on subsidies would also cover situations which […] have a regional or local significance. A wide range of policy areas would be affected. […]” (Point 5)
Therefore, the KdK very clearly states: “An anchoring of rules or principles on state aid in horizontal agreements such as in an institutional agreement or a framework agreement is out of the question.” (Point 10)
At most, individual bilateral agreements may regulate principles on state aid, but only if they “take account of Switzerland’s federal structure and the characteristics of each economic sector”. However, the KdK has legitimate doubts that a contract drawn up by Brussels could meet these requirements: “It should be borne in mind that the EU system is not constitutionally and state politically compatible with the Swiss system. An adoption and dynamic further development of EU regulations is therefore excluded in any case.” (Point 11)
If nothing else, a state aid scheme would have to be included in the individual agreement (point 14), and control would only be admissible by a Swiss authority and under Swiss law (point 16/17).
In addition, a Swiss supervisory authority should at most have a recommendation authority vis-à-vis the federal, cantonal and municipal authorities. Repayment obligations or other sanctions would have to be excluded (point 18).
So much for the Conference of Cantonal Governments. Well done! They could teach Ms Leuthard and her colleagues a thing or two … However, this is not quite what the EU Commission wants to hear from Switzerland …

Voices from the most varied angles: We do not need a framework agreement

It becomes clear already on the basis of these two examples – the abolition of the ban on cabotage and the restriction of state aid – that it is no wonder that our Federal Councillors do not want to tell us what this clouded-in-secrecy framework agreement is to say. The more of its desires the EU wants to pack in, the less likely is the citizens’ “aye” in the referendum vote.
It is gratifying that more and more well-known personalities from very different angles agree that Switzerland does not need a framework agreement:
Daniel Lampart, Head of the Secretariat and Chief Economist of the Swiss Trade Union Confederation (SGB), on 20 January in the Swiss tabloid “Blick”: “In our view, the framework agreement is not something that Switzerland should have. It is more the EU Commission that wants it and less the member states. From an economic point of view, there is no urgent need for action.”5
Gerhard Schwarz, former head of the NZZ (Swiss newspaper “Neue Zürcher Zeitung”) city desk and director of the independent free-market Swiss think tank Avenir Suisse, and Rudolf Walser, former chief economist of the Swiss corporate union economie suisse and also at Avenir Suisse, list in the “Neue Zürcher Zeitung” of 9 April a whole series of reasons why the agreement should not be concluded - and above all not in a “hard-to-understand hurry”: “Firstly, a trade volume of around CHF 240 billion (2016) is annually transacted practically without any friction on the existing contractual basis. Secondly, in the framework agreement, the EU is the “demandeur”. Switzerland or the European and Swiss economies have never asked for an institutional framework agreement. Thirdly, there are currently no issues that urgently call for a bilateral agreement [...].” Fourthly, Schwarz and Walser advise to wait until Brexit is settled. In comparison, a quick and unbalanced solution is “really a ‘red line’” – for all liberals as well as for all those who consider Switzerland’s political system [...] to be less bad than that of its European partners and the EU.”6
According to “Finanz und Wirtschaft“ (finance and economics) and Current Concerns banker Felix W. Zulauf admonishes the Federal Council loudly as follows: “Berne can never negotiate good contracts with the EU, if its own representatives prefer to sit on the other side of the table.”7
Finally, Rolf Dörig, President of the Swiss Insurance Association and Chairman of the Board of Directors of the temp staffing firm Adecco and of the insurance company Swiss Life, had the opportunity to speak at the DFA Ambassadors’ Conference on 2 May and concluded his address with the words: “It is not necessary for us to come to a framework agreement with the EU at all costs. We are partners at eye level. I hope that our Federal Councillors are courageous. I am convinced that the people will reward them for it.”8 It is to be hoped that the head of the EDA and his diplomats took good note.
So, when it becomes ever clearer that we do not need an institutional framework agreement and that it does not fit the Swiss state structure – what makes our team in the Federal Council and in the federal administration want to bring it about anyway – by hook or by crook? What makes them almost tell the Brussels bureaucracy to believe that much might be squeezed out of Switzerland? The Federal Council and some of the parliamentarians elected by the people will have to justify themselves to us.     •

1    media release of 28 June 2017
2    “Kantone rüsten sich wegen EU-Forderungen” (Cantons get prepared because of EU-demands) in the Swiss newspaper “Ostschweiz am Sonntag” of 2 July 2017, also see “Status review at midyear 2017” in Current Concerns No 17/18 of 25 July 2017.
3    EU Commission Information for consumers. State aid to the economy
4    KdK position statement. State aid rules applied by Switzerland and the EU. Plenary assembly of 23 March 2018
5    Lüchinger, René. “We don’t need a framework agreement!” Interview with SGB chief economist Daniel Lampart. “Blick” of 20 January 2018
6    “Forgotten red lines”. Guest commentary by Gerhard Schwarz and Rudolf Walser. “Neue Zürcher Zeitung” 9 April 2018
7    “Straighten up EU-Switzerland relations” by Felix W. Zulauf. Current Concerns No 10 of 17 May 2018
8    “Agreement with the EU – not at all cost”. Guest commentary by Rolf Dörig. “Neue Zürcher Zeitung” of 18 May 2018