Swiss minister pessimistic on swift EU treaty, wary on Britain joining EFTA

Switzerland is unlikely to strike a deal with the European Union this year over a stalled partnership treaty, it is an economy minister said, extending an impasse that has hurt bilateral ties and disrupted cross-border share trading. European Commission President Jean-Claude Juncker has urged Bern to wrap up the accord before his term ends on Oct. 31, when German politician Ursula von der Leyen is set to replace him.

The Swiss government has also said it would like to clinch a deal by then if three final points can be clarified. Economy Minister Guy Parmelin, however, told the SonntagsZeitung newspaper that he was pessimistic, given that representatives of Swiss labor, employers, and cantons had been unable to find common ground Switzerland could use in the talks.

"We want a good solution that can win majority support, and that is not the case at the moment," said Parmelin, a member of the right-wing and eurosceptic Swiss People's Party. "I don't think we can wrap up this year. Our agenda and that of the EU allow a conclusion only next year at the earliest," he said, citing Swiss elections in October, the creation of a new European Commission team and a Swiss referendum due next year on abolishing free movement of EU citizens.

Brussels blocked EU-based investors from trading on Swiss exchanges from July 1 as the row escalated over the treaty under which non-member Switzerland would routinely adopt the EU single market rules. The Swiss retaliated by banning EU venues from hosting Swiss stock trading. In Bern, resistance to the treaty -- negotiated over 4-1/2 years and Switzerland's top foreign policy issue -- encompasses the normally pro-Europe center-left to the anti-EU far-right, which both see the pact infringing Swiss sovereignty.

Failure to secure a treaty deal with its biggest trading partner means Switzerland gets no new access to the single market, its crucial export outlet. The partners have 120 bilateral economic accords that would stay in place but erode over time when they are not updated. Research cooperation could also stop. "I think the EU would weaken itself if it no longer cooperated with Switzerland on research," Parmelin said.

"We are then forced to seek alternatives, perhaps along with Britain, if the EU remains dogmatic." Parmelin played down a Swiss media report that he would urge post-Brexit Britain to join the European Free Trade Association (EFTA), which groups together Switzerland, Iceland, Liechtenstein, and Norway. He said some Swiss politicians liked the idea but the Swiss cabinet had not discussed it.

"I have not heard that this is needed by Britain. If Britons want that, we will review it, but I believe it would be risky," he said. "Given its size, Britain would dominate the rest of EFTA."

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