Just one in five Swiss back crucial deal on relations with EU

Only 20 percent of Swiss voters are in favour of their government signing a major draft deal on the future of bilateral relations with the European Union in its current form, a new poll shows.

Just one in five Swiss back crucial deal on relations with EU
The EU says the draft draft deal is non-negotiable. File photo: Depositphotos

A further 26 percent want no deal at all, according to the representative survey run by the country’s Tamedia group in mid-May.

Meanwhile, 41 percent of voters would prefer to see the Swiss government go back to the negotiating table and win a better deal for Switzerland.

Read also: What you need to know about the draft Swiss–EU deal

Of the group who support new talks, 32 percent said Switzerland’s top priority should be fine tuning the agreement to ensure Swiss wages are better protected against competition from cheaper workers from EU countries.

And 27 percent believe the focus of any new talks should be on getting a guarantee from the EU that Switzerland will not have adopt the EU’s Citizen’s Rights Directive – a move that would most likely lead to higher welfare payments for Swiss-based EU citizens.

The draft Swiss–EU deal (here in French) has been on the table since last November and is the result of years of negotiations designed to update and streamline relations between Bern and Brussels.  These relations are currently based on around 20 main agreements and 100 secondary agreements.

Read also: Swiss government unveils new measures favouring Switzerland-based workers

For Switzerland, keeping Brussels on side is crucial to ensure it continues to have access to the all-important EU Common Market.

The EU has repeatedly stated that the draft deal is non-negotiable and has threatened sanctions – including barring Switzerland’s stock exchange from trading EU company shares – if Switzerland doesn’t sign on by the end of June.

But the Swiss government has so far stood firm in the face of EU pressure to get the deal done and dusted, arguing it needs more time to consult internally given a domestic context of extreme scepticism in the face of all things EU.

Hopes in Brussels that Switzerland might soon sign the deal were dealt a blow on Sunday when Economy Minister Guy Parmelin said new talks were necessary.

“We have listened to all the important players: business, unions, parties, cantons and experts. The government knows there is no majority support for the text as it currently reads,” he told Swiss newspaper SonntagsBlick.

According to the SonntagsZeitung newspaper, current discussions within the Swiss government are not about whether new talks should go ahead, but about when and how.

Read also: Switzerland votes to tighten gun laws, safeguard EU relations

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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.