Switzerland-EU partnership deadline looms
The European Union is threatening that from Sunday midnight, to terminate its preferential treatment of Swiss stock exchanges. From July 1, the EU would no longer recognize Swiss stock-exchange regulations as being equivalent to its own.
Switzerland, last week announced a “protective” plan set to take effect on Monday that would bar EU exchanges from trading in certain Swiss shares.
EU-based brokers and banks usually generate more than half of the turnover on Swiss stock markets, including holdings in heavyweights such as Nestle, Roche and Novartis.
Although not directly linked with the partnership treaty, preferrential treatment termination is being used by the EU as a bargaining chip to get Bern to ratify the deal.
The partnership treaty, in the works since 2014 and officially known as the Institutional Framework Agreement, is supposed to “ensure a more uniform and efficient” governance on issues such as mutual market access and labor movement between the alpine nation and surrounding EU neighbors.
Although not a member of the EU, Switzerland already has some 20 bilateral agreements with the bloc and even makes a financial contribution to the EU. After the USA and China, it is the EU’s third largest trading partner.
Under the treaty text, Switzerland would be aligned with EU single market rules, including freedom of movement precepts and scrutiny by the European Court of Justice (ECJ).
Switzerland has however withheld ratification, with a parliamentary election due next October and its citizens entitled to force a referendum on the issue.
A six-month extension, granted last December, expires this Sunday, June 30.