Tuesday

19th Nov 2019

EU angers Switzerland over stock market access

  • 'The EU is acting this way to weaken the Swiss financial centre,' said Swiss president Doris Leuthard (r), who threatened possible retaliation (Photo: European Commission)

The EU angered Switzerland on Thursday (21 December) when it granted Swiss stock exchanges access to EU markets for only one year.

The decision on equivalence, which implements a new Markets in Financial Instruments Directive and Regulation (called MiFID II/MiFIR), will enter into force on 3 January.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 year's of archives. 30-day free trial.

... or join as a group

It was adopted by the European Commission on Thursday after member states - except the UK - supported it.

Its renewal next year will depend on progress in the negotiations between Switzerland and the EU over an institutional agreement on their long-term relations.

"We will be assessing progress on that by end of next year," said commission vice president Valdis Dombrovskis.

He argued that "Swiss operators will continue enjoying access to the EU market, and EU investment firms will be able to trade shares in Switzerland."

But in Bern, Swiss president Doris Leuthard said "the EU is acting this way to weaken the Swiss financial centre."

"It is unfounded and unacceptable to link this technical issue to the institutional question," she insisted after an emergency meeting of her cabinet.

The Swiss government pointed out that the commission recently granted the US, Hong Kong and Australia access to EU markets unlimited in time.

Switzerland "fulfils the conditions for the recognition of market equivalence," Leuthard said, adding that the EU's decision was "a discrimination".

The commission argued that in comparison with these three countries, "the scope of the Swiss decision is much greater, as the trading of Swiss shares in the EU – and vice versa – is more widespread."

"This decision should not come as a surprise," a commission official said in Brussels.

The official pointed out that the linkage between the equivalence and the institutional agreement was "the reflection of what has been repeated by the commission and member states for the past three years."

He said that the decision to limit the equivalence to one year was justified because there is "dissatisfaction that no progress has been made in the institutional negotiations and that no progress will be made in the timeline expected."

Switzerland and the commission have been negotiating an institutional agreement since 2014 in order to give a legal framework to a set of more than 120 bilateral agreements - the main ones covers issues like police, justice and tax cooperation, agriculture, and free movement.

Talks are currently stuck over state aid and the role of the EU Court of Justice in overseeing the agreements.

The EU official noted that the commission made proposals in November to unblock the talks and that Switzerland was "beginning to see the political consequence" of the deadlock.

Possible retaliation

The Swiss government said on Thursday it was considering retaliation to the EU's decision, including the suspension of €1billion in aid to eastern Europe countries that was recently approved after years of delay.

EU-Switzerland relations have been strained since Swiss voters voted in a referendum in 2014 in favour of introducing immigration quotas into the country's constitution.

In reaction, the commission suspended Switzerland's participation in the EU research and student programmes, Horizon 2020 and Erasmus+.

It took more than two years, until December 2016, to agree on a new free movement regime between the EU and Switzerland.

Negotiations over free movement, as well as on the ECJ's role, have taken place as the EU is also negotiating the UK's exit, with the two same issues being among the most controversial topics.

The commission has however dismissed the idea that it was tough on Switzerland in order not to set a precedent that could be then used by the UK.

EU and Switzerland agree on free movement

EU states approved a new Swiss law that will allow EU citizens to work freely in Switzerland despite a 2014 referendum on immigration quotas.

Switzerland threatens EU immigration quota

The Swiss government announced it would limit immigration from EU countries with a unilateral quota by March 2016 if it is unable to strike a deal with the EU.

EU gives Switzerland another six months for a deal

The EU commission is giving more time to the Swiss government to endorse a deal that would put various sectorial agreements to access the single market under one deal. Nevertheless, after Brexit, the EU has had enough of exceptions.

EU urges Swiss to move on talks or face sanction

The EU commission tells Switzerland that clarifications to the draft deal are possible - but not renegotiations. The message is clear to 'Brexit' Britain as well: the Swiss model is over, there are no special agreements.

News in Brief

  1. Hungary's new commissioner approved by MEPs
  2. Balkan coal power plants fail to meet emissions targets
  3. Belarus vote: zero opposition candidates elected
  4. Germany: Tehran should hold dialogue with protesters
  5. US ex-diplomat: Trump's 'historical mistake' on EU
  6. France's MoDem finance director indicted on EP funds
  7. Cyprus hopes for reunification talks in December
  8. Russian link to €406m crypto disappearance

Column

These are the crunch issues for the 2019-2024 EU commission

These developments will largely determine who will be running the world in the coming decades and perhaps generations. If the Europeans can't find an answer over the five years, they will be toast. And we haven't even mentioned climate change.

Stakeholders' Highlights

  1. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms
  2. Nordic Council of MinistersNordic Climate Action Weeks in December
  3. UNESDAUNESDA welcomes Nicholas Hodac as new Director General
  4. Nordic Council of MinistersBrussels welcomes Nordic culture
  5. UNESDAUNESDA appoints Nicholas Hodac as Director General
  6. UNESDASoft drinks industry co-signs Circular Plastics Alliance Declaration
  7. FEANIEngineers Europe Advisory Group: Building the engineers of the future
  8. Nordic Council of MinistersNew programme studies infectious diseases and antibiotic resistance
  9. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  10. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  11. Nordic Council of MinistersNo evidence that social media are harmful to young people
  12. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021

Latest News

  1. Von der Leyen commission on track for December start
  2. Ukraine boats added to EU-Russia summit preparations
  3. Migrants in Malmo - separating fact from fiction
  4. Which parties and countries chair the EP committees?
  5. European beekeeping in crisis
  6. France unveils new model EU enlargement
  7. Key moments for new commission This WEEK
  8. EU threatens legal action against UK over commissioner

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Join EUobserver

Support quality EU news

Join us