A European Union diplomat said on Monday that Swiss stock exchanges are set to lose their access to EU investors from July because Brussels and Switzerland have so far failed to reach a compromise over their future partnership.
Swiss bourses have free access to the larger EU market thanks to an “equivalence” status that the EU has granted them. But that expires at the end of June unless it is renewed.
The European Commission has set as a precondition for proposing that extension that Bern endorses a deal on its overall relations with the bloc, which was agreed in November after years of negotiations.
In a meeting of top negotiators on June 12, Brussels offered Switzerland clarifications on key issues raised by Bern on future relations. But the Swiss replied on Friday that this was “not enough” and would continue assessing the draft deal in an internal working group they plan to set up, the EU diplomat who is involved in the talks said.
Bern wanted clarifications on protecting Swiss wages, regulating state aid, and spelling out citizens’ rights.
“The Swiss want to reopen the whole agreement on these key issues,” the diplomat said, adding that this was impossible.
“As things stand right now, no way we can extend,” the official added.
Swiss government officials were not immediately available for comment.
Failure of the talks could send shock waves through Switzerland that go far beyond a diplomatic deep freeze.
If equivalence is not extended, EU-based banks and brokers will no longer be able to trade on Swiss exchanges. They now generate more than half the turnover on Swiss stock markets.
Under EU rules, the Commission has to propose an extension of the Swiss bourses’ equivalence by this week. The proposal must then be endorsed by the 28 EU states five working days later.
The Commission holds its weekly meeting on Tuesday. If no decision on extension is made at that meeting, Swiss exchanges are set to lose access in July, the official said.
Although in principle a decision could be made by the Commission until Friday, the diplomat said it was highly unlikely – also because the Swiss have made it clear they do not plan to make a new offer, the official said.
In a letter sent to Bern last week, the EU Commission’s president Jean-Claude Juncker said open issues had to be closed before June 18.