Brussels, 15/05/2007 (Agence Europe) - On Tuesday 15 May, the Council decided to authorise the Commission to open negotiations with Switzerland on the application of European state aid rules under the 1972 EU-Switzerland free trade agreement. Belgium, Latvia and Luxembourg abstained. The matter was a Point A, not for discussion, item on the agenda of the meeting of ministers responsible for development policy. The Council aim is to “negotiate a mutually acceptable solution” for the amendment of certain corporate tax regimes applied by Swiss cantons that apply more favourable tax levels to foreign source income than to domestic source income (see EUROPE 9365).
“Switzerland has taken note,” indicated a diplomatic source, noting that European External Relations Commissioner Benita Ferrero-Waldner will speak on this matter of “discussion”, not “negotiation”. The Swiss Confederation now expects shortly to receive a letter from the Commission formally asking it to grant itself a mandate so that negotiations can begin, perhaps as early as next month. Only then will it respond. The previous day, Micheline Calmy-Rey restated her country's position that Switzerland “has nothing to negotiate” with the EU on cantonal taxation, the Swiss press reported. “There is clearly a difference of opinion with the European Union on this issue. This is of concern to me, because Switzerland has very close relations with the EU,” she acknowledged. In Switzerland, new federal elections will take place in October. (mb)