EU/Swiss Treaties To Come Into Effect On 1st June

by Ulrika Lomas, Tax-News.com, Brussels

02 April 2002

After four years of negotiation, a contested referendum, and a cliff-hanger ratification process by the fifteen EU nations, the seven bilateral agreements between Switzerland and the European Union are due to take effect on 1st June. The agreements cover transport, agriculture and freedom of movement among other aspects.

One of the most important changes triggered by the bilateral agreements will be easier access to the Swiss labour market for foreigners. European Union citizens will have the right to live and to buy property in Switzerland if they win an employment contract. Likewise, Swiss citizens will be able to work and live in EU countries. The agreements include detailed provisions to recognise professional and technical qualifications between Switzerland and the EU.

The agreements will likely have a positive effect on the Swiss economy by stimulating trade with the EU, which surrounds the alpine country. The economy has suffered recently along with its neigbours, and is generally sluggish, although recent forecasts see an improvement later in 2002.

The Swiss Institute for Business Cycle Research (KOF) reported that its monthly business barometer for February stood at –0.80, up from a revised -0.89 in January, signalling a rise in GDP growth in six months' time. Twenty-two leading economists in the Business Economists’ Consensus (BEC) have also revised their forecasts for economic prospects upwards. The BEC, which includes economists from private sector firms, universities and the State Secretariat for Economic Affairs, said that GDP was expected to grow by 1.2% in 2002, with growth rising to 2.2% in 2003.

That doesn't sound too bad, but has to be seen alongside Irish GDP growth of 11% in 2000 and 6% in 2001. This year the Irish are having to put up with a mere 3.5% growth, but expect to jump back to 6% next year. That's the target for Switzerland to aim at as well, although admittedly they are starting from a much higher GDP per head than Ireland.

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