The UK and Switzerland: EU non-members trying to get in
Mutual agreements between the UK and Switzerland are an attempt to overcome the evident disadvantage of not being a formal participant in the European single market. But the Swiss case cannot be a template for the UK to overcome its Brexit woes.
A mutual recognition agreement (MRA) in the financial sector, ‘aimed at facilitating or improving cross-border market access in the banking, insurance, asset management and capital infrastructure sectors’ should be concluded between the UK and Switzerland by the summer of 2023. It is the latest brave attempt of the two EU-nonmembers to defend their turf in an economic sector that matters to London as number one financial center in Europe and also to Switzerland where financial services constitute an important part of its economy. A bilateral MRA on mutual recognition of technical testing of some industry products, so called conformity assessment, has entred into force on 1 January.
No common path
But does that mean that there is a common path for the two countries to overcome the evident disadvantage of not being an official part of the EU single market? This applies to the UK as a result of Brexit. In the case of Switzerland, Brussels is not ready to simply ‘roll over’ the bilateral treaties guaranteeing free access to many areas of the single market. European unification has made considerable progress since the latter were concluded two decades ago and they are coming up for renewal now. Is there, in short, a ‘Swiss-style arrangement’ to benefit London to get all benefits from the Single Market while soft-pedaling, for internal reasons, the related closeness to the EU? The short answer is no. To see why, we have to go back a bit in the history of European unification.
The Zeitenwende of 1990
The big geopolitical transformation of Europe at the end of eighties and the beginning of the nineties – both for the good with the implosion of the USSR and its Eastern European glacis as well as for the bad with the nationalist wars of agressions in Ex- Yugoslavia – changed the political environment for all four of the traditional neutrals in Europe. Whereas Sweden, Finland and Austria eventually choose to join the EU as full members, Switzerland’s way to accept a changed continent proved far more tortuous. The time-honored principle of neutrality supposedly stood, and continues to stand in the way. There is a striking ressemblance here with the idea of British uniqueness due to its imperial past. However different in nature, both arguments serve the nationalist side of politics in both countries in their resistance against anything labeled ‘Europe’.
European Economic Area
Mirroring the nationalist surge of Brexit, politicians from that political spectrum defeated Switzerland’s first step towards a unifying Western Europe in the shape of the European Economic Area (EEA). When the popular referendum to enter the EEA failed, a combination of wily negotiation by the Swiss side and some leniency on the side of the EU let Switzerland off the hook, in the form of the so-called bilateral agreements which anchored considerable Swiss participation in the single market. The most important point for Brussels however, was the fact that a Swiss request to start negotiations for adhesion was at that time still on the table, so the EU could reasonably expect that the particular blend of direct democracy, enshrined in the Swiss constitution needed a bit more time to come around to accept fully the ultimate benefits of belonging to a unifying European continent.
Needless to point out that Brexit, the majority will of the British people to leave Europe, offers no such assurance to the EU negotiators tasked to shape the future relationship with the UK.
Migration and autonomous follow up
Another basic difference in the negotiation basics is migration. This is an area where Swiss national interests run parallel to those of continental Europe. Unsurprisingly then, Switzerland, as opposed to the UK, is a full member of ‘Schengen’ and contributes regularly to Frontex to secure European, thus also Swiss borders.
However, whereas the Swiss Minister of the Interior is entitled to participate in all Schengen related deliberations, such is evidently not the case in many other areas where EU members are among themselves to legislate. What is left for Berne is autonomous follow-up of single market rules, discussed and decided without Swiss participation.
European Court of Justice
Not a very comfortable nor particularly dignified position for a self-respecting country. Without a doubt such a position would even be less acceptable to the UK, where automatic alignement with EU rules is the second reason, after free mobility for persons, why Brexiters wanted out of the EU. The third abhorrent point to the latter is the acceptance of the European Court of Justice as supreme instance to all law directly related to the EU. And yet here is one of the crucial points where a heretofore hard Swiss negotiating position towards Brussels at present is softening in view of the overall price. The price of being allowed within the the single market without full EU membership.
Zeitenwende 2022
It remains to be seen whether the second geopolitical earthquake to hit Europe since the 2nd World War, Putin’s war of agression against the EU applicant Ukraine will lead to fundamentally change the present positions, both rooted in the past, of the two governments. An interesting first test could come in the shape of the ‘European Political Community’ created expressly as a forum for all European countries, EU-members or not, adhering to the EU’s core values and permitting European cooperation in areas such as security, energy and infrastructure. For the UK and Switzerland it could be a decisive moment to clearly indicate whether Brussels is seen as friend or foe.
Picture: DaveLevy