Brussels welcomes release of Swiss ‘cohesion payment’

Politicians debating in the Senate on Thursday Keystone / Anthony Anex

The European Union has welcomed the Swiss parliament’s decision to unconditionally release the second cohesion contribution. At the same time, the European Commission has insisted on a binding payment mechanism for the future.

This content was published on October 1, 2021 - 10:04

On Thursday Switzerland’s two parliamentary chambers approved unblocking CHF1.3 billion ($1.41 billion) in payments to poorer European Union members in a bid to thaw frosty ties with its biggest trading partner.

The government wants to free up the “cohesion payment” – frozen in a 2019 row over mutual recognition of stock market rules – as a sign of goodwill after it unilaterally walked away in May from seven years of negotiations with Brussels for an "institutional framework agreement" to cement long-term ties. The talks were scuppered by differences over the draft bilateral treaty that critics said infringed too much on Swiss sovereignty.

Cohesion payments are seen as the entry fee for non-EU members like Switzerland or Norway to take part in the European Single Market.

Brussels had been pushing Switzerland for a decade for a treaty that would sit atop a patchwork of over 100 bilateral accords and have the Swiss routinely adopt changes to single market rules.

With the treaty dead, it has blocked any additional Swiss access to the single market, the lifeblood for the export-led Swiss economy, and relegated Swiss-based scientists to the sidelines of its Horizon Europe research programme.

Members of the right-wing Swiss People’s Party had opposed authorising the payment, saying there was no assurance it would persuade the EU to soften its hard line on the Swiss.

“Releasing the money alone is no guarantee that Switzerland can take part in Horizon, for example,” Foreign Minister Ignazio Cassis acknowledged during the debate. “That is the risk the government is prepared to take.”

Benefits of payment

For its part, the EU said after parliament’s decision that in order for the money from the second cohesion contribution to be paid out, a memorandum of understanding must be signed between the EU and Switzerland.

This will pave the way for the payments to be made without further delays in order to reduce the economic and social disparities between the regions and to promote cooperation in the area of migration, the EU Commission said in a statement.

However, Brussels also said that this contribution was a “natural, logical return service for Swiss participation in the world’s most important single market”. It should not be forgotten that the last tranche of the first cohesion contribution was paid out in 2012, it added.

For the future, a mechanism is needed to ensure that Switzerland makes a financial contribution that meets the standards of the EU and the European Economic Area (EEA) states, the Commission said.

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