Brussels, 21/01/2008 (Agence Europe) - The difference of opinion between Switzerland and the European Union over taxation in the cantons has not as yet affected the excellent bilateral relations between the two partners (see EUROPE 9544). However, there is a shadow hanging over EU/Switzerland relations which may, if this tax dispute is not resolved in the relatively near future, interfere with the implementation of agreements in place or to be negotiated in the future on other dossiers. “We can feel this shadow hanging over us”, confirmed Jacques de Watteville, the new Swiss ambassador to the EU, speaking on Friday 18 January to give the press an overview on EU/Swiss relations. “The tax dossier does not prevent Switzerland and the EU from negotiating on other dossiers of mutual interest”, he added, referring to such issues as electricity, Switzerland's membership of the “Schengen” zone, or the extension of free movement of persons to Bulgarian and Romania. Although this failure to see eye to eye has not yet “had any effect” on EU/Switzerland relations, “this does not mean that this will not be the case” in the future, the ambassador warned.
The position of the Swiss authorities on the text dossier remains the same: the accusations of the EU are unfounded. The tax measures in force in certain Swiss cantons and which apply to certain companies which are based there have no impact on the EU/Switzerland free-trade agreement of 1972 (EUROPE 9427 and 9365). There are, therefore, “no grounds to negotiate” on the basis of the accusations put by the Commission, Mr de Watteville insisted. Nonetheless, the Helvetic Confederation is open to discussion with the European Union. European civil servants and Swiss diplomats will also meet again this week for a second meeting on the tax question. A referendum on modernising the tax policy will also be held in Switzerland on Sunday 24th February. If reforms are made, the Swiss authorities report, they will be carried out autonomously. They may resolve certain problems related to the tax dispute, but they may also give rise to others… Is there a timeframe for the issue of canton taxation to be sorted out? “No, this will take time, and the EU is aware that it will take time”, the Swiss ambassador replied. He stated that “decisions of principle” may be taken in the “not too distant” future, as there may be a certain amount of flexibility in their implementation. The European side is now waiting to see which direction Berne will decide to take, particularly by means of the reflection underway on tax modernisation.
Speaking warmly of the “extremely good, broad and intense” relationship between the EU and Switzerland, Mr Watteville stressed the need for all concerned to “see the wood for the trees”. This disagreement should not eclipse the smooth functioning of all of the bilateral agreements underpinning this relationship and does not, at this moment in time, have any impact on negotiations under way in other areas. If all goes as planned, the agreement allowing Switzerland join the “Schengen” zone will enter into force in one month's time and will be implemented in November 2008, the ambassador pointed out (EUROPE 9559). Negotiations are continuing on the extension to Bulgaria and Romania of the agreement on the free movement of persons (EUROPE 9577). The same is true of negotiations aiming to relax border control rules with a view to facilitating trade between Switzerland and the EU (“24-hour” rule) and also Switzerland's participation in the early warning system in the fight against bird flu. Although there is not yet any consensus in Switzerland on whether negotiations on a bilateral agreement on the field of electricity should be entered into, exploratory discussions abroad have started between the two partners (EUROPE 9540). The idea of a free-trade agreement is also at an advanced stage. According to Mr de Watteville, an agreement would be of interest to the Swiss Confederation if it dealt with both tariff and non-tariff barriers, if it allowed Swiss farmers to reduce their production costs and if it also covered processed agricultural products.
In 2008, other dossiers will be included on the agenda of EU/Switzerland relations. The Swiss authorities will be keeping a careful eye on the Commission report on the implementation of Directive 2003/48/EC on the taxation of savings revenue. This report, which is scheduled for the end of 2008, will take a particularly close look at the functioning problems of the directive and will report back on discussions held with other international financial centres, specifically ones in Asia (see EUROPE 9445, 9294). These discussions were one of the conditions for Switzerland's participation in the European legislation. Last spring, the Swiss authorities stated that they intended to redistribute nearly €250 million to certain member states in the framework of tax collected on the savings revenue invested by European citizens in Swiss banks (EUROPE 9416). Lastly, Switzerland will also pay close attention to the EU's actions in the western Balkans, and notably in Kosovo. 10% of the Kosovar population lives in Switzerland, Mr de Watteville observed. (M.B.)