Brussels bullies put £200bn squeeze on Switzerland as country refuses to cave to EU

Switzerland’s ‘special relationship’ with the EU explained

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The Swiss medical industry is expected to be smashed in the latest showdown looming over the pair’s often fractious relationship. As of tomorrow, the country’s medical-technology companies will lose their ability to freely export to the EU. They’re due to be relegated to “third country” status, which means they must establish a representative within the bloc, meet the EU’s product-labelling standards and abide by swathes of red tape.

This has left the industry as a pawn in the battle over the hodgepodge of Swiss-EU agreements as they attempt to reach a single international treaty to govern their relationship.

A further deterioration in their ties could see Switzerland’s electricity market, industrial companies and banking sector dealt a serious blow in their access to the EU’s single market.

Rene Schwok, a professor of political science at the University of Geneva told Bloomberg: “It’s a minefield that unfortunately gets rolled out in front of us.

“Each one of these mines will explode.”

Talks over a “framework agreement”, designed to simplify ties between the EU and Switzerland, is at the heart of the row.

Wrangling over the pact was plunged into chaos after nationalist politicians rejected its terms amid fears it cedes too much sovereignty to Brussels.

As a result, the Swiss have refused to sign up to the treaty, unveiled in 2018, and continue to struggle on with swathes of bilateral agreements signed decades ago.

Brussels has attempted to force Switzerland to drive the pact through by cutting the country’s access to EU stock trading.

But this failed and the bloc is now upping the ante in a bid to pressure Bern into eventually buckle in the talks over trade.

With the worst of the coronavirus pandemic now behind them, eurocrats in Brussels are turning their attentions to the Swiss issue once again.

Experts have predicted that there is a lack of appetite for compromise in EU circles, as a result of the recent post-Brexit deal with the UK.

Nicolas Veron, a senior fellow at the Brussels-based Bruegel think-tank, said: “I don’t really see the incentive for the EU to compromise, and that’s related to Brexit.

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“With Brexit, the EU has had to think harder about what it means to be in the single market and what rights and privileges come with that.”

And insiders close to the talks have suggested that both sides are in for a rocky side as a result of the EU’s latest stance on trade.

Last month Jacques de Watteville, Switzerland’s former chief negotiator with Brussels, said there’s a “hardening of tone in the air”.

But there is also little to suggest that Bern is willing to compromise, with officials struggling to keep the deal alive because of the nationalist Swiss People’s Party.

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Swiss business lobbyists are pushing hard for the government to sign the pact amid fears Brussels will continue to restrict their access to the bloc.

Jan Atteslander, economiesuisse’s head of international relations, said: “If you think long term, you see only disadvantages in economic terms for both sides.

“For us, the damage is probably a bit bigger.”

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