EU Neighbourhood Watch – Monitoring EU relations with the UK and Switzerland – May 2022

"Neighbourhood Watch" by exfordy is licensed under CC BY 2.0

Every month, Brussels Report’s editor-in-chief Pieter Cleppe provides an update on how EU interactions with its economically most important neighbours, the United Kingdom and Switzerland, have been going.

Also over the last month, some important developments happened in the EU’s relationship with both Switzerland and the UK, economically the EU’s most important neighbours.

A new Swiss proposal on the future of bilateral relations with the European Union failed to deliver a breakthrough, following a meeting between Switzerland’s chief negotiator Livia Leu met with the European Commission’s Juraj Nociar , the head of cabinet of Commissioner Maroš Šefčovič. Leu tweeted that “Important differences remain to be discussed.” Swiss public broadcaster SRF carried the headline “No agreement: The wind from Brussels could hardly be cooler”.

This was the second exploratory meeting on a new Swiss proposal that has come to be known as “Bilateral 3”. It involves negotiating the different aspects – whether the ECJ can serve as the arbiter, the degree of market access etc. – in each individual single market agreement, away from some kind of overarching approach, which is something the EU prefers. It wants to “find a systematic solution” that applies equally to all agreements that would have been covered by the framework agreement, which involves “regular and fair” Swiss payments to EU cohesion funds,  a “guillotine clause” providing for all of the bilateral agreements to  terminated in case one is cancelled, and of course a role for the EU’s own top court. In sum, the EU is simply repeating its old demands over and over again.

Noteworthy however is that in Switzerland, the idea of joining the European Economic Area (EEA) is back on the table, as the National Council – Switzerland’s lower house – adopted by 112 votes to 69 with 6 abstentions a postulate put forward by Roland Fischer, a Lucerne Green Liberal, calling on the Federal Council – the Swiss government – to examine the advantages and disadvantages of joining the EEA and to report on it.

Interestingly, an analysis on Swissinfo suggests that “the EEA could also experience a revival in the Western Balkans as an alternative to the faltering process of EU enlargement and to counter the Russian sphere of influence, which is regarded as destabilising.”

The obvious problem with this is that this arrangement would mean that Switzerland would be obliged to take over 100 percent of relevant EU legislation. It is true that epic discussions can be held over the question which legislation is actually “relevant” and that Switzerland would be stronger towards the EU when able to negotiate with other EEA allies, like Norway, but at the end of the day, the EEA means that one becomes a “fax democracy”, as NATO chief Stoltenberg once described his own country when he served as Norway’s Prime Minister. In sum, I remain unconvinced that such an arrangement is desirable for democracies, apart from perhaps as a transitional arrangement. A first interesting test of the mood will be on 15 May, when the Swiss will vote in a referendum on Switzerland’s contribution to the European border and coastguard agency Frontex.

Another important development was the Swiss approach towards the Western sanctions against Russia. Even if Switzerland has joined some of the sanctions action, for example by banning Russian nationals form registering trusts in the country, it most certainly does not go all the way. Switzerland has for example held up German arms deliveries to Ukraine by blocking the re-export of Swiss-made ammunition used in Marder infantry fighting vehicles desired by Ukraine.

This is a complex matter, but it is probably a healthy thing to have some more reluctant countries, like Switzerland, keeping a cool head. As foreign policy analyst Clint Ehrlich puts it, “Western support for Ukrainian attacks inside Russia will backfire – and may risk the complete destruction of Ukraine”, given how cross-border attacks may give Putin the excuse to begin a full-scale military mobilization and drastically escalate his attacks on Ukraine.

Closer UK-Swiss ties

Over the last month, there was also quite some diplomatic activity between Switzerland and the UK, including the Swiss government’s social security accord with the UK and a visit by Foreign Minister Ignazio Cassis, who holds the rotating Swiss presidency this year, to the UK. The agenda of the visit included discussions on the policies of Switzerland and the UK regarding Europe and work has now started on a new enhanced trade deal between the UK and Switzerland. At least this is a small step towards what British PM Boris Johnson has called a potential “Britzerland” alliance between Britain and Switzerland outside the EU. The fact that researchers from both countries remain locked out from full participation the EU’s €95.5 billion Horizon Europe programme, due to a political decision by the European Commission is only one of many common concerns.

The Swiss government should in any case watch closely how the UK is now embarking on yet another collision with the EU over the implementation of checks between Britain and Northern Ireland, laid down in the so-called “Northern Irish Protocol”. This arrangement is something the British conceded in order to get Brexit done – according to former Brexit negotiator David Frost – but which they now want to either get rid of or water down considerably – not clear yet. It is well known that these checks are meant to avoid that controls take place on the island of Ireland or between Ireland and the other 26 EU countries, but as I have often suggested, a compromise could consist in the EU only applying very light touch checks, something which the EU has worked towards. After all, if one is really concerned about goods slipping into the EU single market, the best place to start is not checking goods entering Northern Ireland but taking a closer look at goods entering Europe’s great ports.

Frost has also pointed out that “the purpose of the Protocol was to protect and support the Belfast Agreement…At the moment the Protocol is doing the reverse…The strains it is causing are actively damaging the Belfast Good Friday Agreement.”

One compromise could also be for the UK to conclude a Swiss-style veterinary agreement, but for the UK, this would mean making great concessions on sovereignty. Yesterday’s local elections in the UK are not making things easier, but the UK is keen to continue negotiating.

Also over the last month, a number of new statistics were revealed on EU-UK trade, detailing how on the one hand, Brexit caused U.K. imports from the EU to collapse and caused many small British businesses to give up exporting to the EU altogether, but how on the other hand, London attracted more foreign investment in finance firms than any other city last year. Food prices increases since 2019 were also less dramatic in the UK than in mainland Europe, but of course, at the end of the day, Brexit meant a whole lot of extra bureaucracy, which comes at a cost. This is the consequence of not taking EU reform serious, something which led to Brexit.

A version of this article was originally published by Swiss magazine Nebelspalter.