How bad are the pinpricks of the EU really?

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The EU sticks pinpricks wherever possible. Since the Federal Council broke off negotiations on the framework agreement in May 2021, Brussels has tightened the screw: no new agreements are being concluded or expiring agreements are being extended.

Nevertheless, the Bundesrat is in no hurry to return to the negotiating table. Foreign Minister Ignazio Cassis (61) and EU Commissioner Maros Sefcovic (56) met for the first time on Wednesday in Bern for talks.

The standstill worries the cantons and parliament. On Thursday, the Council of States will discuss a motion calling on the Bundesrat against its will to conduct preliminary negotiations about participation in EU research programmes. If necessary, additional cohesion funds should be offered.

But is that really necessary? Are the pinpricks of the EU so painful that further concessions are needed? A look at the affected areas shows a differentiated picture.

The EU had pricked the first needle in 2019: it no longer recognized Swiss stock exchange regulation as equivalent. The Swiss stock exchange thus lost access to the European financial markets.

The federal government responded with protective measures so that EU companies can still trade on the Swiss stock exchange. So far, the punitive measure has hardly affected trading in Swiss shares.

On the day the negotiations on the framework agreement broke down, the first industry lost its easier access to the EU market: the medtech industry. Companies exporting products such as hearing aids, syringes or diagnostic devices immediately had to show an authorized representative in an EU country and relabel the products. They must now also be approved by an EU inspection body.

This means higher approval costs in the main export market. Nevertheless, the Swiss Medtech Association considers the impact on the industry to be marginal so far.

Switzerland is hit harder when it comes to imports. Because for EU companies, the effort is not worth it. The Swiss market is too small. Every tenth imported medtech product would be missing. Hospitals and buyers are looking for new markets. And that seems to work. The industry says that the Swiss medtech industry will not succumb to the Brussels pinpricks.

The in vitro diagnostics industry, whose products range from blood glucose testing to advanced diagnostics in clinical laboratories, was also quickly hit. Because trade facilitations were abolished, Switzerland had to introduce new rules. Nevertheless, the industry managed to achieve a small success: unlike medtech products, not all in vitro diagnostics imported from the EU need to be relabelled, only those used by non-professionals.

Science pays a high price. With the partial exclusion of the Horizon research programme, not only EU funds are lost. Swiss universities can no longer manage Horizon projects either. Researchers and projects therefore migrate to EU countries.

A survey by the State Secretariat for Education, Research and Innovation (SERI) showed that the participants noticed that their situation was deteriorating. The limited access to financing options and the lack of international networks are perceived as disadvantages.

This also worries the economy. Technology sectors in particular depend on knowledge transfer from European universities. The association Interpharma estimates the annual cost of stopping Horizon Europe at two billion francs. The federal government is trying to put a stop to this partly with its own resources.

At the same time, full membership of the Erasmus+ exchange program is still a long way off. It is becoming increasingly difficult for Swiss universities to attract students to Switzerland. At the same time, well-known universities abroad have not renewed their cooperation, which makes access difficult for Swiss students. However, the SERI cannot provide concrete figures.

The machinery industry will also soon lose easier access to the EU’s internal market. The new EU machinery regulation will come into force in April or May. With a transition period of 42 months, it would apply from autumn 2026.

According to the Swissmem association, many products will have to be certified by an EU body in the future. This makes exporting considerably more complex and expensive. Director Stefan Brupbacher (55) remains convinced that the Swiss machine industry will not falter as a result. But: “The industry needs stability in relation to the EU.”

Other sectors that could come under pressure are agriculture and construction. The EU has tightened up various environmental and health regulations. Because the associated agreements will not be adjusted either, Switzerland must also take into account extra work, extra costs and legal uncertainty here.

In terms of data protection, Switzerland has made adjustments to ensure the same level as the EU. If Brussels refuses to recognize it, Swiss companies will be banned or at least made more difficult to process customer data from the EU.

The lack of an electricity contract is even more pressing. Energy Minister Albert Rösti (55) must find ways and means to give Switzerland a permanent place in the European electricity market. Otherwise there could be no electricity imports in winter. This would have consequences for grid stability and security of supply.

Source:Blick

Livingstone

I am Liam Livingstone and I work in a news website. My main job is to write articles for the 24 Instant News. My specialty is covering politics and current affairs, which I’m passionate about. I have worked in this field for more than 5 years now and it’s been an amazing journey. With each passing day, my knowledge increases as well as my experience of the world we live in today.