Swiss Firmly Reject Plan That Risked Worsening EU Relations

(Bloomberg) -- Switzerland overwhelmingly rejected a plan that could have caused a worsening of relations with the European Union by forcing the government in Bern to renegotiate international treaties.

Two-thirds voters opposed the “self-determination” initiative, which argued for the constitution to take precedence over international law, potentially triggering revisions of treaties if there are conflicts. Polls had indicated a likely rejection.

Swiss Firmly Reject Plan That Risked Worsening EU Relations

Switzerland isn’t a member of the EU but the 28-country bloc is by far its biggest trading partner. Relations are governed by a complex set of bilateral agreements ranging from civil aviation to agriculture and immigration.

Sunday’s plebiscite comes just as the Swiss are seeking to ensure continued recognition for their stock market under the EU’s MiFID II financial market regulations. The current equivalence agreement expires at the end of December.

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Bern and Brussels are looking to cement their relationship via a framework deal, which has been four years in the making. Yet talks ran aground due to a disagreement about labor market access in Switzerland, and the EU has made continued recognition of the Swiss stock market contingent on progress on the political front.

Swiss Firmly Reject Plan That Risked Worsening EU Relations

Swiss Justice Minister Simonetta Sommaruga declined to answer questions about what the outcome of the vote might mean for EU relations when asked at a Bern press conference on Sunday afternoon.

The “no” vote is a rare setback for the anti-immigrant, euro-skeptic Swiss People’s Party, which rose to prominence by fiercely campaigning against EU membership in a 1992 referendum. The SVP put forward Sunday’s initiative in response to a decision by the country’s top court back in 2012 regarding the European Convention on Human Rights. The SVP was also behind the 2014 plebiscite to re-impose quotas on new immigrants from EU countries, which the parliament in Bern later watered down to protect the economy.

Supporters of the “self-determination” initiative had argued it would protect Switzerland’s system of direct democracy, which they believe is crucial for the country’s success. Opponents, including the government and business lobby groups, said it would undermine the close economic ties the country enjoys with its neighbors and jeopardize its much-vaunted stability, which would be negative for the economy.

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