Merkel: Swiss question ‘separate from Brexit’

Switzerland’s negotiations with the EU over immigration should not be entangled with Britain’s decision to leave the bloc, German Chancellor Angela Merkel has said.

Merkel: Swiss question ‘separate from Brexit’
Schneider-Ammann and Merkel met for the fourth time this year. Photo: Michael Kappeler/DPA/AFP

The leader was speaking during a meeting with Swiss President Johann Schneider-Ammann in Berlin on Wednesday, their fourth meeting this year.

“If I was a Swiss citizen, I wouldn’t be happy about being judged in an entirely different light due to a decision taken in a totally different country,” news agencies reported Merkel as saying.

Germany’s position towards Switzerland has not changed following the Brexit referendum, the chancellor added, saying that the two situations “are completely different things”.

“Negotiations with Switzerland should be conducted as though there was no Brexit,” she said.

Merkel added that it was in Germany’s interest for Switzerland and the EU to come to a satisfactory agreement due to the number of Germans who work across the border in Switzerland.

Her stance will be welcomed by the Swiss government, whose attempts to find a way to implement immigration limits — approved by the public in a 2014 vote — without contravening the EU principle of free movement have arguably been complicated by Britain’s decision to leave the EU.

The EU’s negotiations with Switzerland have been overshadowed by Brexit since Britain’s June referendum, with many commentators feeling the EU is loathe to give any concessions to Switzerland that it would then be forced to grant to Britain.

In September EU Commissioner Jean-Claude Juncker admitted that Brexit had complicated the situation and that there would be no common immigration/free movement deal for the two countries.

Switzerland has until February 2017 to find an mutually agreeable solution with the EU, or it may be forced to act unilaterally, risking its raft of bilateral agreements with the bloc.

Following Wednesday’s meeting with Merkel, Schneider-Ammann said he was “optimistic” that a solution would be found by the end of the year.

However Merkel remained tight-lipped over whether she would support Switzerland’s current plan to favour a “light” solution that would impose temporary immigration limits in certain job sectors or regions only, said Le Temps.

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How European countries are spending billions on easing energy crisis

European governments are announcing emergency measures on a near-weekly basis to protect households and businesses from the energy crisis stemming from Russia's war in Ukraine.

How European countries are spending billions on easing energy crisis

Hundreds of billions of euros and counting have been shelled out since Russia invaded its pro-EU neighbour in late February.

Governments have gone all out: from capping gas and electricity prices to rescuing struggling energy companies and providing direct aid to households to fill up their cars.

The public spending has continued, even though European Union countries had accumulated mountains of new debt to save their economies during the Covid pandemic in 2020.

But some leaders have taken pride at their use of the public purse to battle this new crisis, which has sent inflation soaring, raised the cost of living and sparked fears of recession.

After announcing €14billion in new measures last week, Italian Prime Minister Mario Draghi boasted the latest spending put Italy, “among the countries that have spent the most in Europe”.

The Bruegel institute, a Brussels-based think tank that is tracking energy crisis spending by EU governments, ranks Italy as the second-biggest spender in Europe, after Germany.

READ ALSO How EU countries aim to cut energy bills and avoid blackouts this winter

Rome has allocated €59.2billion since September 2021 to shield households and businesses from the rising energy prices, accounting for 3.3 percent of its gross domestic product.

Germany tops the list with €100.2billion, or 2.8 percent of its GDP, as the country was hit hard by its reliance on Russian gas supplies, which have dwindled in suspected retaliation over Western sanctions against Moscow for the war.

On Wednesday, Germany announced the nationalisation of troubled gas giant Uniper.

France, which shielded consumers from gas and electricity price rises early, ranks third with €53.6billion euros allocated so far, representing 2.2 percent of its GDP.

Spending to continue rising
EU countries have now put up €314billion so far since September 2021, according to Bruegel.

“This number is set to increase as energy prices remain elevated,” Simone Tagliapietra, a senior fellow at Bruegel, told AFP.

The energy bills of a typical European family could reach €500 per month early next year, compared to €160 in 2021, according to US investment bank Goldman Sachs.

The measures to help consumers have ranged from a special tax on excess profits in Italy, to the energy price freeze in France, and subsidies public transport in Germany.

But the spending follows a pandemic response that increased public debt, which in the first quarter accounted for 189 percent of Greece’s GDP, 153 percent in Italy, 127 percent in Portugal, 118 percent in Spain and 114 percent in France.

“Initially designed as a temporary response to what was supposed to be a temporary problem, these measures have ballooned and become structural,” Tagliapietra said.

“This is clearly not sustainable from a public finance perspective. It is important that governments make an effort to focus this action on the most vulnerable households and businesses as much as possible.”

Budget reform
The higher spending comes as borrowing costs are rising. The European Central Bank hiked its rate for the first time in more than a decade in July to combat runaway inflation, which has been fuelled by soaring energy prices.

The yield on 10-year French sovereign bonds reached an eight-year high of 2.5 percent on Tuesday, while Germany now pays 1.8 percent interest after boasting a negative rate at the start of the year.

The rate charged to Italy has quadrupled from one percent earlier this year to four percent now, reviving the spectre of the debt crisis that threatened the eurozone a decade ago.

“It is critical to avoid debt crises that could have large destabilising effects and put the EU itself at risk,” the International Monetary Fund warned in a recent blog calling for reforms to budget rules.

The EU has suspended until 2023 rules that limit the public deficit of countries to three percent of GDP and debt to 60 percent.

The European Commission plans to present next month proposals to reform the 27-nation bloc’s budget rules, which have been shattered by the crises.