Swiss – EU relations: it is now time to act
- Introduction Executive summary | Positions of economiesuisse
- Chapter 1 Switzerland’s strategic initial position in European policy
- Chapter 2 Blockade in European policy hurts the economy
- Chapter 3 Common economic interests of Switzerland and the EU
- Chapter 4 Measures taken by Switzerland to minimise economic damage
- Chapter 5 After the breakdown of negotiations: specific demands of Swiss business
Measures taken by Switzerland to minimise economic damage
Stock exchange equivalence
Since the EU still does not recognise Swiss stock exchange regulation as equivalent, the Federal Council decided on 17 November 2021 to extend the emergency ordinance for the protection of Swiss stock exchange infrastructure, which expires at the end of 2022, by six months and adopt it into ordinary law.
With this protective measure, the Federal Council has so far achieved its goal of preservation of the functioning of the Swiss capital market. The business community supports this approach. However, from the perspective of the financial industry, the strategic goal must continue to be the unrestricted equivalence recognition of Swiss stock exchange regulation by the EU Commission. Switzerland fulfils all technical requirements in this respect.
As a countermeasure to the EU Commission’s decision of 26 May 2021 to no longer recognise Swiss medical devices as equivalent (third-country regulation), the Federal Council amended the Swiss Medical Devices Ordinance (MepV) in order to ensure security of supply and market surveillance in the area of medical devices in Switzerland. However, the Federal Council had additionally tightened the law adopted from the EU’s MDR requirements (‘Swiss Finish’). This created high import hurdles for foreign manufacturers.
The industry clearly rejected this: the substitute measures in the area of medical devices, and in particular ‘Swiss Finish’, are in violation of the existing MRA, do not achieve their purpose and are counterproductive in some cases. Fortunately, a pragmatic solution was found with the industry at the end of 2021, which not only helps the domestic medtech industry, but also Swiss healthcare.
The release of the second cohesion contribution was considered by the EU Commission a prerequisite for opening negotiations on Switzerland’s participation in Horizon Europe. By releasing the cohesion contribution, already approved in 2019, without conditions, Switzerland has attempted to break the spiral of linking unrelated topics in the bilateral relationship. The Federal Council approved the associated Memorandum of Understanding with the EU on 24 November 2021. The business community supports this approach.
However, the hoped-for unblocking of Switzerland’s association with the European research framework programme Horizon Europe has so far failed to materialise.
On 17 September 2021, the Federal Council decided to introduce transitional measures until the targeted association of Switzerland; they involve the Swiss National Science Foundation, Innosuisse, the European Space Agency ESA and other actors. The proposed transitional measures were submitted to Parliament with a supplementary notification on the budget 2022 in the winter session 2021. In addition, on 20 October 2021, the Federal Council instructed the Federal Department of Economic Affairs, Education and Research to ensure funding for Swiss participants in those parts of Horizon Europe that are open to them. Further supplementary and compensatory measures will be examined until 2023 and will take effect if Switzerland cannot participate in Horizon Europe as a full member.
The action plan and the chronological order are supported by the business community. However, the measures cannot fully compensate for the opportunities that full association reserves for a country’s researchers and companies. For this reason, association remains the main objective.
Electricity crisis provision
As of 1 December 2021, the Penta countries (Belgium, Germany, France, Luxembourg, the Netherlands and Austria) signed a Memorandum of Understanding on risk preparedness in the electricity sector with Switzerland. This puts Switzerland in a better position to cooperate with neighbouring countries in the event of supply shortages. This is a positive development, but it is limited to crisis situations and cannot replace full participation in the European electricity market.