The Planned EU-Switzerland Treaty Package
Swiss people have three instruments at their disposal with which they can exert direct influence on the political decision-making process in their country: The popular initiative, the optional referendum, and the mandatory referendum
Introduction
No country on earth is more democratic than Switzerland, the Uruguayan political scientist David Altman wrote. The Swiss people have three instruments at their disposal with which they can exert direct influence on the political decision-making process in their country: The popular initiative, the optional referendum, and the mandatory referendum. (1) Citizens can launch a popular initiative to demand an amendment to the Federal Constitution. (2) Citizens may demand that bills passed by the Federal Parliament be subject to a nationwide vote. (3) All constitutional amendments as well as the conclusion of certain international treaties approved by the Federal Parliament are subject to a mandatory referendum: they must be agreed to by a double majority of the people and the cantons.
On 20 December 2024, the Swiss Federal Council approved a package of seven agreements with the European Union (EU) without full knowledge of their content. The institutional features are, however, plain. The treaties provide for the dynamic adoption of EU law by Switzerland, de facto monitoring of Switzerland by the European Commission, and dispute resolution under the supervision of the Court of Justice of the European Union (CJEU). As the CJEU has the reputation of an activist court, the third element has the most serious consequences according to the view expressed here. In addition, Switzerland would be obliged to make an annual payment of CHF 350 million to less prosperous EU member states.
In exchange, Switzerland would secure preferential market access for its industry, but not for its service providers.
Institutionalisation
In 1992, Swiss voters and cantons rejected membership in the European Economic Area (‘EEA’) in the EFTA pillar. EEA accession would have meant: Dynamic adoption of EU internal market law with a co-determination (not co-decision) right, access to the single market but no participation in common policies, and an independent monitoring and judicial structure (EFTA Surveillance Authority and EFTA Court).
After the EEA “No”, Switzerland succeeded in concluding two packages of bilateral agreements that secured preferential access to the single market for its industry. On the other hand, however, Switzerland had to grant the EU the free movement of persons. Wages in Switzerland are significantly higher than in the EU, and taxes are significantly lower. Between 1990 and 2024, the Swiss population grew from 6.8 million to over nine million.
Said agreements are (with one exception) not institutionalised: Switzerland is not obliged to adopt EU laws dynamically; it monitors itself and conflicts are resolved politically in joint committees. However, from 2008, the EU has demanded the institutionalisation of the most important treaties. Switzerland rejected a solution with the EFTA Surveillance Authority and the EFTA Court (with a Swiss member in each body) and in 2013/2014 spoke out in favour of de facto subordination to the European Commission and the CJEU. After two years of negotiations, there were, however, fears that the direct subordination to the CJEU could fail in a referendum.
In 2018, the EU therefore put the dispute resolution model on the table, which the four post-soviet republics Armenia, Georgia, Moldavia and Ukraine have accepted, and that the EU also wanted to impose on the states of North Africa and the Brexit-UK. In the UK debate, the word unequal treaty was used for this. The term unequal treaties was historically used for the agreements that the imperialist powers signed with China and Japan in the 19th century. A prominent feature of these agreements were extraterritorial courts on Chinese and Japanese soil. The CJEU is located on EU soil, but that would not change its extraterritoriality. Nobody knows better what an unequal treaty is than the Brits who have invented this weapon of semi-colonialism at the time.
The planned dispute settlement model would also significantly weaken the position of the Swiss Federal Supreme Court. There would only be a public international law procedure with the EU and Switzerland as parties. Private operators would not have any access to justice, and the Swiss Federal Supreme Court would be excluded from the procedure. Unlike the supreme courts of the EU member states, it would therefore not be in a position to draw “counter-limits” to the CJEU. At the same time, the European Commission could refer judgments of the Federal Supreme Court that do not suit the EU to the CJEU via the arbitration tribunal.
Opaque Negotiation Process
The negotiation process has been and is marked by opacity. Key concerns include:
The decisive institutional concessions were made behind closed doors without a negotiating mandate: In 2013, Switzerland conceded EU Commission monitoring and CJEU jurisdiction in a confidential ‘Non-Paper’. Further commitments were made behind closed doors in a ‘Common Understanding’ in 2023.
The Federal Council approved the treaty package without having seen the final text. The ultimate version is still not available today.
This modus operandi allows the Foreign Ministry to start propagandising in favour of the package and to tell critics that the final text is not yet available.
Conclusions
The plan to manoeuvre Switzerland into such a treaty package is supported by the political left and representatives of the major (not all) industry associations. The left wants Switzerland to take an irreversible step towards EU membership. Business circles are concerned with preferential access to the single market and thus with pecuniary interests. However, those in favour know that the project is sensitive in terms of direct democracy and judicial independence. That is why they have produced the following ruses: Firstly, they say that institutionalisation only relates to seven treaties and that referendum rights remain unaffected. This is being criticised because the institutionalisation of those seven agreements would of course be the first step of many and because the EU would threaten sanctions in the event of a positive referendum against the adoption of EU law. Secondly, attempts are being made to minimise the role of the Court of Justice of the European Union and to magnify that of the arbitration tribunal. Proponents contend that the crucial element is essentially an “independent” arbitration process, while international experts claim that Switzerland would effectively be placed under CJEU jurisdiction.
The Federal Office of Justice has produced an expert opinion on its own initiative in June 2024. According to this paper, the Federal Constitution not only does not require a mandatory referendum (with the double majority of the people and the cantons required), but excludes it. On 30 April, the Federal Council decided to urge Parliament to abandon the double majority requirement. This is unconvincing. As an EU member state, Switzerland would have full voting rights and a seat in the European Commission and the Court of Justice. A treaty that gives the other party all the legislative, monitoring and judicial power must arguably a fortiori be subject to the mandatory referendum.
Disclaimer – The views expressed in this article are the personal views of the author and are purely informative in nature.