EU says Switzerland must endorse treaty before June 18 -letterReuters | Updated: 11-06-2019 19:50 IST | Created: 11-06-2019 19:40 IST
The European Union's chief executive warned Switzerland on Tuesday that it needs to sign a new partnership treaty before June 18 that is central to maintaining Swiss stock exchange access to the bloc's financial markets.
In a letter to the Swiss president, European Commission President Jean-Claude Juncker said he was ready to clarify any doubts but that the November 2018 draft treaty "will not be renegotiated." The Swiss government has demanded more information from the EU on several issues before it signs off on the draft treaty that governs relations, which was negotiated over four years, and which the bloc has sought for a decade.
Juncker, who emphasised that his mandate as Commission chief ends on Oct. 31, said it was "essential" to clinch agreement in the next few days so that European Commission could also endorse it at a meeting set for June 18. Failure to endorse the treaty and begin the ratification process could damage Swiss ties with its biggest trading partner, potentially disrupting commerce and cross-border stock trading.
The main leverage the Commission has over the Swiss is the recognition of the Swiss stock exchanges as "equivalent" to EU exchanges which allows them to access the bloc's single market, and which expires at the end of June. Procedural reasons require the Commission to make a formal proposal for an extension by June 18, an EU diplomat told Reuters last week, as member states would then have five working days to endorse it before June 30.
The Commission originally set Dec. 11, 2018, as the deadline for Swiss approval of the draft treaty but then gave Berne time for public consultation on the accord, providing a six-month reprieve for the Swiss exchanges. After the end of consultations with business, unions and local authorities, the Swiss government said last week that provisions relating to wage and worker protection, state subsidies and citizens' rights still needed to be clarified.
The situation has, in part, been complicated by Britain's negotiations on its EU divorce terms, with the Commission loath to be soft on the Swiss for fear of giving ammunition to Brexiteers demanding a renegotiation of its withdrawal accord.