Bern and Brussels sign Cohesion Fund deal

Foreign minister Micheline Calmy-Rey (left) exchanges documents with her Austrian counterpart Keystone

Switzerland and the European Union have signed a memorandum of understanding in Brussels on the Swiss financial contribution to the ten new EU states.

This content was published on February 27, 2006 minutes

The document sets out how Bern will finance projects to the tune of SFr1 billion ($760 million) over five years as part of the so-called Cohesion Fund.

Swiss Foreign Minister Micheline Calmy-Rey signed the memorandum on Monday with her Austrian counterpart, Ursula Plassnik, and the EU's commissioner for external affairs, Benita Ferrero-Waldner.

A statement from the European Commission said the financial contribution had to be seen in the context of Switzerland benefiting from access to the EU's enlarged internal market and to a number of EU programmes and activities.

Switzerland, which is not a member of the EU, had pledged to pay its contribution to the fund after it signed a second set of bilateral relations with the EU in May 2004.

Privileged partner

Ferrero-Waldner welcomed the signature of the memorandum by saying that Switzerland was the EU's closest neighbour and "privileged partner".

"Switzerland's new commitment is a fitting contribution to the economic and social development in the enlarged EU," she added.

"This contribution further deepens and strengthens the excellent relations which already exist between the EU and Switzerland."

The EU's Council of Ministers had earlier in the day ratified four bilateral accords with Switzerland that had been pending.

They included the extension of the free movement of people to the new EU states, the MEDIA agreement on film promotion and an accord on the environment. Bern hopes these will come into force on April 1.

Lengthy discussions

An accord on statistics that was also ratified will come into force from next year.

After the Swiss cabinet had approved the SFr1 billion package last Wednesday, Economics Minister Joseph Deiss said that the funding was allocated for a five-year period, but payments would probably be spread over ten years.

The approval came after lengthy discussions with Brussels over distribution of the funds, with older countries including Portugal and Spain also wanting a slice of the cake.

Bern insisted that the aid be reserved for the newest and least prosperous states, a position that Brussels finally accepted.

Under the accord, almost half the funding will go to Poland (SFr489 million). Hungary will benefit to the tune of SFr131 million, while the Czech republic will receive SFr110 million.

swissinfo with agencies

Key facts

Switzerland is the EU's closest neighbour, not only geographically, but also culturally and economically.
The EU is Switzerland's main trading partner.
Over 800,000 EU citizens live and work in Switzerland, and many more cross the borders or travel through the country on a regular basis.

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In brief

The EU's Cohesion Fund is a structural instrument that has helped member states reduce economic and social disparities and stabilise their economies since 1994.

After the latest enlargement of the EU in 2004, the Commission requested that Switzerland make a financial contribution similar to the one made by the European Economic Area countries (Norway, Iceland and Liechtenstein).

The three countries and Switzerland are united in the European Free Trade Association, which has its headquarters in Geneva.

At an EU-Switzerland summit in May 2004, Bern pledged a total of SFr1 billion.

The Swiss Senate has approved a law covering the issue. It now goes before the House of Representatives in March.

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