Switzerland A surprise dispute between the EU and Switzerland bridges the gap – one sector is already suffering the consequences

For years, Switzerland enjoyed special treatment from the European Union. Now the benefits end one by one when more than a hundred contracts expire.

Vincent Lefauconnierin the phone has been ringing loudly in recent days. Callers are colleagues selling medical devices from Switzerland to other European countries.

Lefauconnier is the CEO and founding member of Neo Medical, a company that sells new technology used in spinal surgeries. Colleagues have wanted to know how the company has been able to continue selling to EU countries, even though the agreement between the European Union and Switzerland governing the sector expired last week.

“I don’t have to give an easy answer. We started preparing already about a year and a half ago, ”says Lefauconnier.

Read more: Switzerland walked out of negotiations with the EU

Companies that did not anticipate the EU-Switzerland divide have had to suspend their deliveries as marketing authorizations issued by the Swiss licensing authorities are no longer valid in EU countries.

“Many thought there was no problem with two partners as strong as the European Union and Switzerland,” says Lefauconnier.

They were wrong.

At worst the situation may delay the treatment of patients. In the longer term, however, it is not just a question of selling medical devices.

The EU-Switzerland relationship is exceptional. Although Switzerland is not an EU country, it is part of the Schengen area of ​​free movement. In addition, it has wide access to the European internal market, despite the fact that the country voted against joining the European Economic Area at the end of the last millennium.

“It may have been visible that many want raisins from a bun.”

As Switzerland did not want to commit to the economic area, cooperation and access to the internal market are based on more than 100 sectoral agreements.

However, the EU wants closer cooperation. That is why, since 2014, the EU and Switzerland have been negotiating a framework agreement that would replace a patchwork of numerous agreements.

The talks are stuck in fundamental contradictions, and on Wednesday, May 26, Switzerland announced it would end the talks. The EU responded by making it clear that it did not intend to renew any sectoral agreements until the framework agreement had been adopted.

Swiss Federal President Guy Parmelin held a press conference on 26 June when Switzerland announced that it would conclude negotiations with the European Union on a framework agreement.

There is a slow cooling of relations ahead as contracts start to age one by one.

European integration sworn friend, former commission president Jean-Claude Juncker said in 2019 that his season the largest the failure was, he did not enter into force a framework agreement with Switzerland.

In recent years, the Union has been in pain with the dilemma that became apparent during Britain’s separation from the EU, Brexit: nation states want the internal market, but political commitment is not inspiring.

“It may have been visible that many want raisins from a bun. However, a common internal market cannot in practice be agreed without common binding rules of the game, ”University of Turku Specialist Kimmo Elo says.

Since Brexit, the EU has wanted to make the common rules of the game particularly clear so that the interests of one country cannot be used as a weapon elsewhere.

According to Elo in a difficult situation, it is a matter of Swiss domestic policy and the fundamental principles of the European Union.

The framework agreement would leave the final say to the European Court of Justice in the event of a dispute. The EU justifies this on the basis of equality and justice.

Switzerland, on the other hand, is cautious about foreign courts. The Alpine region has a hundred-year-old tradition of neutrality and independence, and at worst the EU has been seen as a reborn German-Roman Empire with the Swiss are from the Middle Ages until kept a distance.

Switzerland has a long tradition of direct democracy and referendums. There was a sign on the side of the road near Arni at the end of May stating a position on the referendum on agricultural pesticides. There are fears in Switzerland that EU negotiations will take Switzerland’s decision-making power to Brussels.

In addition, right-wing populists in Switzerland are opposed to free immigration and trade unions fear that the European workforce will undermine the high wages and benefits of Swiss people. The differences concern, among other things, how easily EU citizens could settle in Switzerland.

“It’s basically about Switzerland’s sovereignty and the same right-wing populist development as other European countries,” Elo says.

The EU is not more prepared than Switzerland for flexibility. The changes called for by Switzerland infringe on the fundamental principles of the Union, such as free movement.

According to Elo, the absoluteness of the EU is understandable: “From the researcher’s point of view, if we are flexible now, there is an endless road ahead”.

Economically Switzerland’s withdrawal from the internal market is a severe blow to the whole of Europe, but especially to Switzerland itself.

Half of Switzerland’s imports and more than a third of its exports go to EU countries, and some studies show that Switzerland is the single largest beneficiary of the internal market.

In addition, the inland Alpine state is dependent on the airspace, energy and labor of EU countries. For example, well over a third of doctors come from abroad, most in EU countries.

“Switzerland has always been international and open. The whole of society is built on the EU and the international community, and Switzerland needs Europe for almost everything, ”says Elo. “If you think about the big picture, the decision feels cornered.”

From Switzerland Vincent Lefauconnier, who sells cutting equipment, still sees a bright future and is not afraid that the attractiveness of the region’s market will decline.

However, on behalf of small and new businesses, he is concerned. It will be more difficult for them to become customers of EU licensing authorities and to cope with the increasing regulation that future access to the internal market will require.

However, Lefauconnier does not regret anything.

“If I could go back to 2013, I would do everything the same way. I would set up a company and set it up in Switzerland. This will change the way we operate, but Switzerland will continue to be a great country and economic center. ”

Turning points for Switzerland and the EU

  • 1973 The free trade agreement between Switzerland and the European Community enters into force.

  • 1992 Switzerland applies for membership of the European Union. Switzerland dropped out of the application process when the Swiss knocked out membership of the European Economic Area in a referendum held the same year.

  • 1999 Switzerland and the European Union sign the first bilateral agreement. The seven parts of the agreement dealt with the free movement of people, air transport, road transport, agriculture, barriers to trade and public procurement.

  • 2008 Switzerland joins the Schengen area.

  • 2014 Switzerland and the European Union began negotiations on an institutional framework agreement to replace separate agreements.

  • In 2018, the institutional framework agreement was completed, but was later rejected by Switzerland.

  • By 2020, more than 1.4 million EU citizens lived in Switzerland and about 400,000 Swiss citizens lived in other EU countries.

  • 2021 The value of trade between Switzerland and the EU is around € 1 billion every working day. The EU is Switzerland’s largest trading partner and Switzerland the EU’s fourth largest trading partner.

  • On 26 May 2021, Switzerland announced that it would suspend discussions with the EU.

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