Switzerland refused to sign a new treaty with the European Union, threatening its relationship with its biggest trading partner.
The Swiss government said the two sides weren’t able to bridge differences on state aid and wage protections, which it described as “key concerns for Switzerland,” in a statement on Wednesday. “The conditions are thus not met for the signing of the agreement.”
The announcement ends years of wrangling, which at one point nearly thwarted the smooth functioning of Switzerland’s stock market. Failure to come to an agreement, which would have secured Switzerland’s continued access to the single market, also constitutes a major risk for the economy, which exported goods worth more than 100 billion francs ($112 billion) to the bloc last year.
Switzerland’s benchmark stock index pared gains. The SMI was up 0.2% as of 4:42pm in Zurich, having climbed as much as 0.7% earlier in the session.“We regret this decision,” the European Commission said in a statement. “Privileged access to the single market must mean abiding by the same rules and obligations.” Unveiled in 2018, the so-called framework agreement was designed to allow continued market access, building on individual arrangements governing everything from agriculture to civil aviation. But the draft agreement ran into opposition in Switzerland, where the nationalists worried their country would lose its independence and labor unions feared it would erode high local wages.
Over the past few months Swiss officials tried and failed to win concessions from the EU, which only recently completed its acrimonious separation from Britain.
Another point of dispute was the Swiss having to take over elements of EU law. To help their country move in lockstep with the bloc, authorities will look into updating some areas of their law autonomously.
The Bern-based government “nevertheless considers it to be in the shared interest of Switzerland and the EU to safeguard their well-established cooperation and to systematically maintain the agreements already in force,” it wrote in the statement. “It therefore wishes to launch a political dialog with the EU on continued cooperation.”
