Migration controls will complicate Swiss-EU relations

Subject Switzerland's popular vote on migration controls. Significance The already-difficult relationship between Switzerland and the EU has been complicated by the popular vote on migration controls for EU citizens in February 2014. Its implementation will violate the EU's principle of free movement of people, which the EU has refused to renegotiate. Nonetheless, the Swiss government has to find a solution before a three-year deadline expires in February 2017, which will turn the latent conflict with the EU into an acute one. Impacts Firms will face higher bureaucratic obstacles to employing job seekers not already residing in Switzerland. A broadening of the mutual market access between Switzerland and the EU is highly unlikely in the foreseeable future. The prospects for Swiss participation in EU programmes such as Horizon 2020 and Creative Europe remain uncertain.

Significance The Commission judged that Irish authorities had forgone this sum as part of a special arrangement with the global technology company, thereby granting it illegal state aid. This case illustrates the confusing state of tax affairs in the EU, particularly regarding mobile international companies. Impacts The Commission is unlikely to go much further than the laudable but limited initiatives on CCCTB, CbCR and BEPS in the foreseeable future. The uncertainty resulting from Ireland's appeal against the Commission's decision could make the country less attractive to investors. Given Ireland's extraordinary bounceback in GDP growth in 2015, there is some latitude for greater tax convergence with the EU15.


Subject The Bratislava summit. Significance Leaders of the EU-27 -- all EU member states except the United Kingdom -- held an 'informal' summit in Bratislava on September 16, aiming to demonstrate their shared resolve to move forward with the integration process in the wake of the Brexit vote. While leaders agreed to a roadmap of policy plans, they skirted around the most divisive issues facing the EU and did not agree on any significant new initiatives. Impacts EU governments again failed to agree to a workable plan to address the migrant crisis, rendering an EU-wide solution increasingly unlikely. Significant agreements on improved security cooperation may not be reached until well into 2017. The EU is likely to block any UK efforts to maintain its current access to the single market without allowing for free movement of workers.


Significance The UK government says it is determined that free movement of people from the EU will end after Brexit. Impacts An upcoming immigration White Paper will provide greater clarity about the UK government’s approach. Proposals to reform the EU's Posted Workers Directive could trigger Eastern European opposition, deepening the east-west divide. Stricter post-Brexit UK immigration policies could lead to labour shortages and skills gaps in sectors such as agriculture and health. Improving euro-area economic prospects could encourage EU nationals living in the United Kingdom to return to the continent.


Significance A series of scandals surrounding Prime Minister Andrej Babis, including the newly released Pandora Papers, threaten to undermine ANO’s popularity. A challenge may come from the centre-right SPOLU coalition, campaigning on a strong anti-Babis programme. The key question is which way undecided voters will finally lean. Impacts The Communists, who are currently teetering on the 5% electoral threshold, could eventually disappear from high-level politics. If ANO retains power, the government's European policy will focus on defending Babis’s interests before the EU. Either of the two opposition blocs would pursue a more constructive European policy if they won. Introduction of the euro is unlikely in the foreseeable future, as supporters of the common currency are significantly in the minority.


Significance Under the CAI, which is the first economic agreement between the EU and China, Beijing made most of the concessions in order to get a deal agreed before US President Joe Biden’s inauguration. The EU secured greater liberalisation of market access and some commitments on unfair practices and human rights issues. Impacts The CAI will not undermine EU instruments (foreign subsidy control and investment screening) to scrutinise Chinese business in the EU. The CAI will likely highlight the EU’s struggles to use economic deals to shape the regulatory landscape outside the bloc. Over time China could well decide to water down some of its commitments in the CAI. UK firms will be at a disadvantage where the EU has negotiated greater market access, including in financial services and the auto sector.


2021 ◽  
pp. 499-556
Author(s):  
Robert Schütze

This chapter analyses the constitutional regime of ‘negative integration’ in the context of the free movement of goods. The free movement of goods has traditionally been the most progressive fundamental freedom within the internal market. The negative integration regime for goods is split over two sites within Part III of the Treaty on the Functioning of the European Union (TFEU). And with regard to goods, the EU Treaties further distinguish between fiscal restrictions and regulatory restrictions. The fiscal restrictions include pecuniary charges that are imposed on imports or exports (customs duties and discriminatory taxation), while the regulatory restrictions include non-tariff measures that limit market access by ‘regulatory’ means. The chapter then looks at possible justifications for such regulatory restrictions.


Significance Belarus's leadership is navigating carefully between Russia and the EU, avoiding alignment with Moscow against the West and exploring ways of engaging Europe on trade. Cautious engagement with the West is accompanied by greater tolerance of domestic dissent -- up to a point. Impacts Manufactured and food exports will remain focused on the Russian market for the foreseeable future. The government's next task is to extricate itself from any awkwardness around the latest US sanctions against Moscow. President Lukashenka recently hinted at handing over some powers to government, but this is likely only after his departure. Even with some more freedom of public action, the opposition is unlikely to evolve into a cohesive force.


Subject EU-Swiss bilateral relations. Significance The relationship between Switzerland and the EU is functional but difficult. Despite some progress on the Mutual Recognition Agreement (MRA) that secures market access for a range of products, a breakthrough is still needed on the most important issue, the institutional framework for sectoral agreements. Negotiations have slowed and the Swiss government faces difficult decisions on the right timing and strategy. Impacts The Swiss government’s decision to resume discussions on new 'cohesion payments' to the EU is likely to create goodwill in Brussels. In the short term, Switzerland's economy and trade are unlikely to suffer from the stalemate in the Swiss-EU political relationship. With Ignazio Cassis as foreign minister, the government is likely to become more sceptical of the EU.


Significance It gained 25.8% of the popular vote, on a turnout of 44.0%. Another opposition party, the Democratic League of Kosovo (LDK), came second with 24.9%. The former governing parties were roundly defeated. Vetevendosje’s victory constitutes a potential watershed moment for Kosovo, 20 years after the country broke from Serbia, although much depends on how effectively the party can govern. Impacts Vetevendosje aims to galvanise economic growth but at the risk of curbing market freedoms, especially in strategic sectors of the economy. Mutual suspicion between Vetevendosje and the EU will complicate efforts at advancing Kosovo’s integration. The election of a pan-Albanian party could galvanise Albanian nationalism in North Macedonia, riven by intra-Slavic party rivalries.


Subject FTA talks and trade tensions between the EU and ASEAN countries. Significance The EU is in free trade agreement (FTA) negotiations with some ASEAN states, even though talks over an ASEAN-EU FTA were paused in 2009. Separately, the EU is pressuring several South-east Asian countries with its trade policies and warnings over human rights. Impacts EU projects in South-east Asia related to sustainability and social justice could suffer reputational damage. Post-Brexit, the United Kingdom could distance itself from EU labour requirements to secure market access in South-east Asia. In the short term, ASEAN-EU trade frictions will have little impact on bilateral foreign direct investment.


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