Breakthrough in talks with Switzerland
By Lisbeth Kirk
The European Union on Thursday (13 May) finally overcame internal differences to clear the way for Bern and Brussels to sign a set of nine bilateral treaties.
These will give Switzerland membership of the Schengen agreement - which would allow it free movement of people across the EU borders - but with an opt-out on sharing information about tax evasion.
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Switzerland was concerned these would threaten banking secrecy.
In return, Switzerland will sign up to the EU’s savings tax directive and levy a withholding tax (35 percent) on EU residents’ savings income in Swiss banks.
Switzerland had refused to sign the deal on taxation until the EU gave Bern an exemption on a part of another treaty – Schengen – to protect banking secrecy.
On Thursday, EU members finally overcame their own differences, and agreed to grant the Swiss this opt-out.
The EU's member states assured Luxembourg they would not be forced to abandon any banking secrecy rules which Switzerland would be permitted to keep.
Switzerland has also promised to pay 650 million euro over five years to support the economic and social cohesion of the enlarged EU.
EU-Swiss summit next week
The Swiss federal government will meet on Monday to discuss the bilateral deal, which could then be signed at the EU-Swiss summit next week, on Wednesday 19 May.
Formal reservations about the compromise were however voiced at Thursdays meeting of EU ambassadors by Denmark, the Netherlands, Sweden and Finland. Also France might have second thoughts to be raised before the dossier is debated by EU foreign ministers, also to meet on Monday, according to the International Herald Tribune.
The new regime is meant to take effect from 1 January 2005, but risks being delayed by parliament in Switzerland.
Three of Switzerland’s four major political parties expressed their satisfaction with news of an agreement in Brussels, reported Swissinfo.
The People’s Party (SVP) however, considers the Schengen deal to be a treaty with a foreign state, requiring a nationwide vote. The SVP-president, Ueli Maurer, has threatened to launch a referendum on this specific issue.
Talks with small states such as Andorra, Liechtenstein, Monaco and San Marino are also to be concluded, but these are not expected to be as difficult as in the case of Switzerland.