EU-Swiss institutional framework progress will be slow

Significance

Without a dispute settlement mechanism in Swiss-EU relations, Switzerland has no legal leverage to defend its rights. Ironically, such a mechanism is the most controversial element of the institutional framework that Switzerland and the EU have been negotiating since 2014.

Impacts

• If Bern dilutes labour market rules to secure EU concessions, this could prompt new alliances between Swiss left- and right-wing parties.
• Firms based in the EU will continue to be able to buy and sell titles on the Swiss stock exchange at least until end-2018.
• A new agreement (pending ratification) will allow 54 heavy-polluting Swiss firms to participate in the EU emission trading system.
• Joining the European Railway Agency will allow Bern to access technical assistance and facilitate Swiss train operations in the EU.
• If Bern abides by its plans to renew cohesion payments, new EU member states may obtain funding for vocational education projects.