BRUSSELS/ZURICH (Reuters) - The European Commission and Switzerland both refused to blink on Wednesday in a standoff over a stalled partnership treaty that threatens to trigger stock trading curbs across Europe from Monday.
Barring an improbable last-minute breakthrough, EU-based banks and brokers will be prevented from trading shares directly on Swiss bourses from July 1. They usually generate more than half the turnover on Swiss stock markets.
The Swiss have vowed to retaliate with a decree forcing all Swiss shares to be traded on domestic exchanges by banning EU bourses from hosting Swiss equities trading.
In Brussels, the Commission said it has had no contact with Switzerland in the past few days on avoiding the expiration at the end of this week of the regime which allows Swiss stock exchanges to access the European Union market.
“There have not been any contact,” the EU executive’s spokeswoman told a news conference. She said there was no update from last week’s meeting of the EU Commission that refrained from proposing an extension to the so-called equivalence regime.
Under EU rules, the EU executive had to decide by June 21 on whether to propose an extension of the equivalence regime. It did not make any proposal by that deadline. As a consequence the preferential regime will automatically expire on June 30.
In Bern, a government spokesman said the cabinet had not discussed the Europe dossier at its weekly meeting.
“If (stock market regulation) equivalence is not given then Plan B will be activated — protective measures for the Swiss exchanges — and that will simply be activated at the end of this month,” he told reporters after the meeting.
Brussels linked the extension to progress on a general partnership treaty, which was agreed in November after years of negotiations but has not yet been endorsed by Bern because of fears over its impact on Swiss labor laws and other issues.
Last week the commission said there was no progress on the partnership treaty. The spokeswoman repeated on Wednesday that the situation had not changed.
She added, however, that Brussels remained open to finalize the overall partnership treaty with Bern by the end of October, when the mandate of the current commission ends.
Editing by Philip Blenkinsop and Alexander Smith