The Swiss government on Thursday lashed out at an EU decision to give Switzerland’s stock exchange only temporary access to the bloc’s single market, labeling it discriminatory and “unacceptable.”
The European Commission on Thursday announced that it would recognize for just one year the so-called equivalence of Swiss trading venues, which is essential to allow European banks and investors to continue to trade in Switzerland.
According to the decision, which had been approved by the bloc on Wednesday, an extension of Switzerland’s stock market equivalence will now depend on progress in broader Bern-Brussels negotiations.
“This equivalence ... can be extended provided there is sufficient progress on a common institutional framework,” aimed at replacing the current system of numerous bilateral agreements, said Valdis Dombrovskis, the European Commission vice president responsible for financial services and the euro.
“We will be assessing progress on that by end of next year,” he added in a statement.
In a rare move, the usually composed Swiss President Doris Leuthard gave a brief, but strongly worded statement, following an emergency government meeting to discuss the EU decision.
Non-EU member Switzerland “fulfils the conditions for recognition of stock market equivalence every bit as much as the other third countries that have been granted indefinite recognition,” Leuthard said. “Switzerland therefore considers this limited recognition to be a clear case of discrimination,” she said, adding that “the linking of this technical dossier with institutional issues is extraneous and unacceptable.”
At its extraordinary meeting on Thursday, the Swiss Federal Council concluded that “there is doubt as to the legality of [the EU] decision,” the statement said.
Leuthard said the government had decided to immediately begin working to “bolster Switzerland’s stock exchange and financial sector.”
One of many measures being considered was the abolition of stamp duty, a tax levied on documents like checks, receipts and marriage licenses, which some economists believe hampers competitivity in the Swiss financial sector.
“Today’s decision by the European Union also risks harming bilateral relations on other important dossiers,” Leuthard said.
She hinted that Bern might backtrack on its recent decision to dish out 1.3 billion Swiss francs (US$1.3 billion) for development aid to the EU, aimed at helping lower income countries in central and eastern Europe.
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