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By Liam Porter

JANUARY 31st MARKED a momentous occasion, not just for the United Kingdom, but for the whole of Europe.

In recent years more member states have clashed with the Commission and are becoming uncomfortable about their relationship with the EU. Poland and Hungary suffer constant criticism and threats of sanctions under the Article 7 procedure. Since the financial crisis there have been repeated challenges for the economic south where the EU’s fiscal policies have caused greatest suffering.

This is all before the hand grenade left behind by the UK’s departure goes off – namely the financial black hole the absence of our annual contributions leaves in the future budget. As EU elites refuse to tighten the belt and continue to demand vast sums of money, the awkward question of who picks up the bill caused turmoil in last week’s plenary session and will continue this week when the next round of funding is supposed to be agreed.

Whilst we in the UK ask, “what next?”, the question on the continent is, “who next?” Countries like Denmark, Italy, Poland, the Netherlands are all being earmarked as the next potential state to leave the Union – the anticipated domino effect that many Brexiteers hope Brexit will catalyse.

One sometimes overlooked case is that of Switzerland. Outside of the EU – yes, but its experience exhibits parallels and lessons for the UK as it too attempts to negotiate a mutually beneficial economic relationship, whilst defending Swiss sovereignty.

Much to the ire of the European Commission, Switzerland has managed to develop a relatively flexible relationship with the European Union. Its bilateral approach of around 120 individual treaties represents a unique model of relationship with the European Union. Whilst Switzerland accepts many of the EU’s rules, including the core areas of freedom of movement and legislation necessary to access parts of the Single Market, it has managed to maintain a sense of control over implementation. The bilateral approach gives tailor-made sectoral agreements and implementation of EU law in Switzerland is governed by a joint commission made up of EU and Swiss representatives.

Some of these agreements are legally bound to each other. The first set of negotiations agreed in 1999 (Bilateral Agreements I) contained seven agreements granting extensive access to the single market and the free movement of persons. As the earliest and most important agreements defining the relationship between the EU and Switzerland they are bound by the Guillotine Clause. If either party were to withdraw from the provisions provided for in one of these seven areas without mutual agreement, the other six would also cease to apply.

But such an awkward relationship, in the eyes of the Commission, could not last. The Swiss exceptionalism was tolerated as long as eventual EU membership was on the cards. The exact scope of the current relationship wouldn’t matter as it would become irrelevant once the Swiss eventually joined.

Switzerland first rejected membership of the EEA in 1992, but continued to integrate joining Schengen and other key elements in the years that followed, up until 2014. As late as 2012, in what seemed like a blow to sovereigntists, a referendum that would require all international treaties to be approved by popular vote was defeated by 75 per cent of voters.

In 2014 the Swiss People’s Party launched a referendum and campaign ‘against mass immigration’ requiring quotas for EU migrants. This referendum passed by a narrow margin, with 50.33 per cent for yes – leading to an inevitable clash with the European Union. The implementation of this referendum without agreement by the EU would lead to the activation of the Guillotine Clause, and threaten Switzerland’s access to the Single Market.

The Commission stuck rigidly to the indivisibility of the four freedoms causing huge strain in relations between Switzerland and the EU as the Swiss government attempted to negotiate an outcome with the Commission that still implemented the result of the referendum.

The compromise measure drafted by the Swiss government passed parliament in December 2016, effectively nullifying the referendum. A political elite, unable to gain compromise from the Commission and unwilling to see through the mandate of the people, watered down the proposals. EU quotas became a hiring preference for those registered as unemployed in Switzerland. The Swiss People’s Party, the original initiators of the referendum protested it as “a betrayal of voters’ wishes”.

With this apparent exposure of the complexities of the bilateral approach and Switzerland’s official withdrawal of its application to join the Union in 2016, the EU saw enough justification to pressure Switzerland to negotiate a new, more formalised framework that would end the flexibility of the bilateral approach and extend the automatic application of EU law in Switzerland.

Negotiations began in 2014 and were concluded in November 2018, covering the most important aspects and undermining the key advantages Switzerland had managed to secure through the bilateral approach.

Throughout this negotiating period Switzerland was continually threatened with losing access to the EU stock exchange, through the Commission’s arbitrary attachment of stock market equivalence to the progress and outcome of the negotiations.

Relations are once again at an impasse. The Swiss Government has refused to implement the new accord due to several outstanding issues and the European Union is refusing to re-open negotiations. In May, in what is being dubbed as Switzerland’s Brexit moment, another referendum will be held on immigration in Switzerland. This limitation initiative, again backed by the Swiss People’s Party, will give the Swiss Government one year to negotiate an end to freedom of movement as provided for in the bilateral agreements.

Switzerland’s refusal to implement the Framework Agreement, despite the immense pressure applied with its implementation coupled alongside stock market equiveillance is admirable.

The UK has shown that you can stand up to Brussels and not be bullied to vote again until you get the right result. The Swiss experience has shown if you give an inch, the EU will take a mile. No level of appeasement is enough to satisfy Brussels.

Liam Porter is a former adviser in the European Parliament. For five years he has monitored developments in the European Union on matters of foreign affairs and defence, providing members with legislative and political advice. Prior to this he studied War and Security at the University of Hull.

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