Hansard

I, too, thank the committee very much for inviting me to this beautiful city so that I can inform members about the relationship between Switzerland and the European Union. Like Norway, Switzerland is not an EU member state, and becoming a member state is not on the political agenda. Also like Norway, however, our economic system is densely integrated with the single market. Some 55 per cent of Swiss exports go to and 75 per cent of imports come from EU countries. Switzerland has been very strongly integrated since 1972, when the first free trade agreement on industrial products was signed between the European Community and Switzerland. That is the basis of our integration with the EU economy. The first shock came in 1992 when we did not integrate the EEA agreement. As in Norway, the agreement had at least in part been built up for Switzerland as a compromise, but in a very important vote in December 1992, the Swiss people said no to it. We were therefore in a new situation, and we had to start a complex process of negotiating bilateral agreements with the EU and the different member states. That was concluded in two waves, the first in 2000 and the second in 2004. Legally speaking, they are among the most complicated treaties that you can imagine. After all, on one side, you had Switzerland and, on the other, you had the EU and its member states, which at the time did not yet number 28. Those complex bilateral agreements have been approved by Swiss voters five times now. There were many referendums, each of which was successful. Perhaps the most important was the one on the free movement of persons that was part of the first package of bilateral treatments. That very important treaty shows how deeply Switzerland is integrated with the EU, especially in relation to the member states of Germany, Italy, France and Austria but also in relation to the UK and other EU member states. Many treaties and agreements—about 135—are part of the package. The first five huge bilateral treaties are tied together by what we call a guillotine clause; if one party negates one of them, all of the others will automatically fall. That will prove to be an important point pretty soon. Then we had bilaterals II, of which the Dublin and Schengen agreements formed an integral part. As a result of those agreements, Switzerland is now more integrated with the European Union than the UK is. As you will also know, we had some problems with taxation, but we finally managed—even in Switzerland—to agree the automatic exchange of information. That agreement was concluded last year and will come into force in about two years’ time. Then we had the second shock: the populist Swiss People’s Party—which, with about 30 per cent of the voters, is the strongest party in Switzerland—managed in February 2014 to pass an initiative to stop mass immigration. It put into our constitution a number of provisions that are incompatible with the agreement on the free movement of persons and which are now open to implementation and discussion. So that constitutional provision exists, but it must be implemented by a statute; according to the constitution, if the Parliament is unable to do that, the Government has to implement it by decree within three years. That is a huge problem. The new provision in the constitution basically says that Switzerland will regulate immigration autonomously; you will now see the importance of the sovereignty issue. It also says that we will regulate immigration with annual quantitative limits and quotas, that we will give Swiss nationals priority when hiring people—which is, of course, absolutely contrary to EU law—and, worst of all, that we will have to renegotiate all treaties that are not in accordance with that new provision, with the agreement on the free movement of persons being singled out. Naturally, the EU said that there was no way that we could discuss or negotiate on the free movement of persons. It is one of the EU’s basic liberties, and everybody understands that there can be no renegotiation on it. Therefore, it is not negotiating on it. It is, however, talking about it; there seems to be a big difference in diplomatic terms, but as a lawyer I have not yet got it. That is where we are today. A quite tough political debate is continuing inside Switzerland and between Switzerland and the European Union. A few months ago, someone had the idea of implementing the new provision with a safeguard clause that could, if the EU agreed, be bilateral. On the basis of the agreement, there is what is called provision 42 under which a mixed committee can vote through a special measure if there is a special danger to the Swiss economy. However, the Swiss economy is doing very well, so, by invoking the prospect of serious social and economic problems, the EU countries probably do not have much understanding of what is happening in Switzerland. Moreover, the Government announced just three weeks ago that if the EU does not agree the bilateral safeguard clause, Switzerland might impose one unilaterally, which of course would be a violation of the same provisions. That is where we stand, and I am ready to answer the committee’s questions. 09:45