March 28, 2018 / 11:05 AM / 4 months ago

Swiss revive plan to support new EU members as ties thaw

ZURICH, March 28 (Reuters) - Switzerland revived plans on Wednesday to contribute an extra 1.3 billion Swiss francs ($1.37 billion) in funds for newer European Union members as relations with its biggest trading partner began improving after a spat at the end of last year.

Non-EU Switzerland contributes to a wide range of projects in the 13 mostly ex-communist countries that have joined the bloc since 2004 to boost their prosperity and stability and also guarantee its own continued access to the EU’s single market.

Bern had suggested it might not follow through with a second 10-year aid package for the new member states after a row erupted in December over Swiss stock exchanges’ access to the EU single market.

But a cabinet meeting on Wednesday decided to move ahead with domestic political consultations on the plan, which will need parliamentary approval.

In a statement, the government tied the payment to “the status and progress of overall relations between Switzerland and the EU, in particular developments with respect to the EU’s recognition of the regulatory equivalence of the Swiss stock exchange”.

Switzerland had accused the EU of trying to undermine its financial centre by granting its stock exchanges only temporary access to the bloc. Bern wants the same treatment as other countries, enabling EU investors to trade in Switzerland.

Diplomats say the mood has brightened considerably since Bern laid out this month its negotiating position on a new treaty Brussels wants that would formalise ties currently governed by a patchwork of bilateral sectoral accords.

It marked the first time that the seven cabinet members from four parties had agreed on a unified platform for talks, a major step forward after their squabbling hampered years of negotiations and frustrated top EU officials.

Brussels has put pressure on Switzerland to sign a treaty that would see it adopt EU laws governing the single market as the price of enhanced access. The European Court of Justice (ECJ) would give its opinion on disputes involving how to interpret single-market rules.

This is anathema to the anti-immigration Swiss People’s Party, the largest in parliament, which has two cabinet seats.

Many Swiss conservatives are also wary of giving “foreign judges” such power, but both sides have now focused on setting up arbitration panels to help break the impasse.

$1 = 0.9506 Swiss francs Reporting by Michael Shields Editing by Gareth Jones

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