Switzerland and Brexit

All eyes have rightly focussed on the recent Brexit vote and what it will mean in practice, in particular for the UK’s continued membership of the Single Market.  The key to this is most likely to be the free movement of people. Since its inception in the 1950s, the free movement of people has been one of the cornerstones of the Single Market, and its predecessor, the Common Market.

What is important to note is that a country does not have to be a member of the EU to be in the Single Market. You just have to sign up to the four key conditions: the free movement of goods, services, capital and people. You also have to pay a fee. This is the case with both Iceland and Norway, who are full members of the Single Market.

Switzerland is slightly different, in that it is not a full member of the Single Market, but has full access to specific sectors, but not the financial sector for example. Switzerland’s relationship with the EU is covered by a series of Bilateral Agreements and these include the free movement of people. However in February 2014, the Swiss voted in a referendum, by 50.3% to impose quotas on migration from the EU. The referendum gave the Swiss government three years to meet this requirement. That is until February 9th, 2017. For this to happen a new agreement with the EU needs to be reached very soon, for Switzerland to have the time to pass the necessary legal changes in time to meet this February 2017 deadline.

This is why what happens with Switzerland is potentially crucial to the UK’s hopes of remaining in the Single Market without the free movement of people. The omens are not good.  After two and a half years of negotiations no meeting of minds, let alone a new agreement had been reached. The most that might have been agreed with Switzerland would have been something similar to the emergency brake on immigration, that David Cameron managed to negotiate with the EU. However after the Brexit vote that is no longer on offer. And having been rejected by the UK, it is very unlikely that the EU would be interested in offering a similar deal to Switzerland.

Switzerland is already suffering the consequences of the 2014 vote, as it is no longer part of the Erasmus programme, and the EU has stalled on any further bilateral agreements. No new deal is in the pipeline and the reality is that without a new deal, all the Bilateral Agreements will come to a shuddering end in February 2017. This is due to the inclusion of a so called guillotine clause. If any part of the agreements is abrogated, the whole thing ends.

Switzerland is beginning to seriously run out of time. The Brexit vote ended the emergency break option. This leaves Switzerland between a rock and a hard place. Either it tries to hold another referendum, perhaps on keeping the Bilateral Agreements, including the free movement of people, or it prepares for life outwith the Single Market.

The Swiss experience does not offer much hope for those Leavers who assumed that the UK could get its cake and eat it. If there is to be a deal on ending or limiting the free movement of people it will now have to be offered to both Switzerland and the UK. As the previous offer – an emergency brake – has been rejected by the UK, it is not clear that there will be much stomach in the other 27 member states for any further concessions. Any limit to this foundational principle effectively ends the EU. As any offer would have to applicable to the other 27 member states.

The blindness of the Leave campaign as to what was happening in Switzerland is yet another example of how irresponsible the whole campaign was. Unfortunately it is the rest of us who will have to suffer the consequences. Unless you live in Scotland, where independence offers a way out of this mess.

 

 

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2 Comments

Filed under Europe, European Union, Politics, UK

2 responses to “Switzerland and Brexit

  1. bjsalba

    Just read that Swiss bankers are looking to combine with UK bankers for EU negotiations. Interesting is it not?
    http://in.reuters.com/article/britain-eu-banks-swiss-idINL8N19T39R

    By the way, sorry to be picky but a friend (to whom I recommended your piece) pointed out that it should be an emergency brake not break.

  2. Thanks for the link. It does show just how important the EU is. Not sure the EU will want to give a cartel of international banks the sweet deal they would like. France, Germany and Ireland for example most unlikely, as they have their own financial sector to protect and promote. Have corrected the spelling mistake, thanks for pointing this out.

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