Swiss stock market in turmoil 

News Mondays - Bernard Frossard

In this heatwave season, a chill has been cast over Swiss-European Union relations. On Thursday June 27, Berne decided to require European financial centers to obtain recognition if they wish to continue trading Swiss securities. For its part, the European Commission announced that Switzerland's stock market equivalence would not be renewed.

This time-limited stock market equivalence was introduced in December 2017 and renewed in November 2018. The EU had attached importance to the progress of negotiations on the framework agreement. The future of the Swiss market is at stake, and Swiss diplomats will have to redouble their efforts to obtain concessions.

Impatience in Brussels 

On the Brussels side, Switzerland and the Federal Council were too slow to sign the agreement. For the Swiss, it was not possible to agree to the form, as the content displeased certain long-standing or recent sovereignists on both the right and the left. In the run-up to the federal elections, the subject is very sensitive. No one wants to make it a campaign issue, as the subject is complex and unappealing.

We have to understand that, from their point of view, our European partners don't understand this all-Swiss prudence. Clearly, they simply make the unfortunate confusion between political agenda and Swiss political time, which can seem so long. Just look at the process involved in a referendum, which can take up to ten years. 

A giant that never sleeps 

In this way, the Helvetians have awakened the European mastodon, and their balance of power no longer resembles that of David against Goliath. The European Commission is finally showing its teeth, and we can see the limits to which it can be frustrated. Now that the wheels are in place to punish us, the Federal Council is finally deigning to present us with a plan that will enable the Swiss market to survive. 

This plan began with the amendment of an ordinance last November. This amendment would require European companies to buy shares in Swiss companies via the Swiss stock exchange. Is this really a viable long-term solution? More than anything, it looks like a way out: Switzerland senses that it no longer has a strong hand in the negotiations, and that any new proposal will eventually be read and irretrievably rejected. 

Just listen to Jean-Claude Juncker - President of the European Commission until the end of August - on the microphone of Darius Rochebin: «Sign the agreement!», the kind of injunction that the Swiss are not at all fond of, but which makes us reflect on our real capacity to negotiate with this technocratic giant. How much longer are we going to play cat and mouse, now that we know that this cat is more like a tiger than a Munchkin? 

Switzerland-EU, the headache 

On the face of it, we should be in favor of a framework agreement that unifies and simplifies the multitude of bilateral treaties we've already signed. But the major problem with the Swiss is that they are fussy about the slightest thing that could diminish their political rights. And rightly so. A real impasse, then, which can only disappear if Europeans take full measure of the democratic power we possess. An ice age is beginning. Let's hope that after the federal elections, a few degrees will warm up this relationship.

Write to the author: bernard_frossard@hotmail.ch