June 11, 2019 / 1:35 PM / 4 days ago

EU to clear up Swiss doubts on new treaty, seeks deal by June 18: letter

BRUSSELS (Reuters) - The European Union’s chief executive pledged on Tuesday to clear up Switzerland’s concerns about a draft treaty to govern ties so that Bern can endorse it by June 18 and allow the Swiss stock exchange to maintain access to the bloc’s markets.

FILE PHOTO: European Commission President Jean-Claude Juncker arrives at a European Union leaders summit after European Parliament elections to discuss who should run the EU executive for the next five years, in Brussels, Belgium May 28, 2019. REUTERS/Piroschka van de Wouw

In a letter to the Swiss president, European Commission President Jean-Claude Juncker said he was ready to clarify any doubts but that the November 2018 draft treaty “will not be renegotiated.”

The Swiss government has demanded more information from the EU on several issues before it signs off on the draft treaty that governs relations, which was negotiated over four years, and which the bloc has sought for a decade.

“It is up to us to proceed quickly,” Juncker said in the letter that was made public by the Commission. “The European Union’s team ... will provide the necessary clarifications, particularly on the free movement of people.”

Juncker, who emphasized that his mandate as Commission chief ends on Oct. 31, said it was essential to clinch agreement in the next few days so that European Commission could also endorse it at a meeting set for June 18.

Failure to endorse the treaty and begin the ratification process could damage Swiss ties with its biggest trading partner, potentially disrupting commerce and cross-border stock trading.

Swiss-EU relations suffered in 1992 when Swiss voters rejected joining the European Economic Area. This led to a negotiated patchwork of 120 accords that now govern ties.

The treaty in question would sit atop those accords and focus on five areas: free movement of people, aviation, land transport, mutual recognition of industrial standards, and processed farm goods.

BREXIT MESSAGE

The main leverage the Commission has over the Swiss is the recognition of the Swiss stock exchanges as “equivalent” to EU exchanges - which allows them to access the bloc’s single market, and which expires at the end of June.

Procedural reasons require the Commission to make a formal proposal for an extension by June 18, an EU diplomat told Reuters last week, as member states would then have five working days to endorse it before June 30.

The Commission originally set Dec. 11, 2018 as the deadline for Swiss approval of the draft treaty but then gave Berne time for a public consultation on the accord, providing a six-month reprieve for the Swiss exchanges.

After the end of consultations with business, unions and local authorities, the Swiss government said last week that provisions relating to wage and worker protection, state subsidies and citizens’ rights still needed to be clarified.

The situation has, in part, been complicated by Britain’s negotiations on its EU divorce terms. The Commission is loath to be soft on the Swiss for fear of giving ammunition to Brexiteers demanding a renegotiation of Britain’s withdrawal accord.

Reporting by Robin Emmott; Editing by Mark Heinrich

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