Switzerland is facing the prospect of losing recognition of its stock markets under EU rules. Some suggest the EU is playing it hard as Brexit talks reach their end-game.
Lacher's plan entails redirecting share dealing back to Switzerland — one of the EU's so-called 'third nations' — by prohibiting Swiss shares from being traded in the EU.
But time is running out. Swiss stock exchanges have temporary equivalence status under the EU's MiFID II (the Markets in Financial Instruments Directive 2004 — an EU law that provides harmonized regulation for investment services across the 31 member states of the European Economic Area). These expire at the end of the year.
Without access to EU bourses, Switzerland would likely retaliate with the same measures for EU traders on Swiss bourses, with potentially dire effects for the Swiss economy. Some 30 percent of trading in Swiss shares is in the EU, the rest in Switzerland and most activity in Swiss shares on SIX comes from traders in the EU.
The EU has linked extending equivalence with Bern's completion of a framework agreement to replace 120 bilateral accords governing relations between Bern and Brussels. The 4-year talks have stalled as the soon to be 27-member bloc opposes Swiss bank guarantees and policies protecting higher wage levels in Switzerland.
A framework agreement would force Swiss rules to automatically align with EU ones in areas such as legal development, supervision, interpretation and dispute settlement. In arbitration disputes between the EU and Switzerland, the European Court of Justice would also play a key role.
It's a political thing
Bern has accused the bloc of using the stock market as a political pawn.
Brexit has pushed the European Commission to ramp up pressure on Bern to sign the agreement. Some observers believe the EU's executive wants the framework to be more restrictive so Switzerland-EU relations can't be used as an example for countries looking to leave the EU.
European Commission vice-president, Valdis Dombrovskis, said recently that insufficient progress had been made in talks with Bern to extend the recognition of Swiss stock exchanges regulation.
Without access to EU bourses, Switzerland would likely retaliate with the same measure for EU traders on Swiss boursesImage: Reuters/A.Wiegmann
The shadow of Brexit
Charlotte de Montpellier, an economist with ING Belgium, told DW that the loss of market equivalence could permanently damage relations between Switzerland and the European Union.
"The problem is that the European Union is Switzerland's largest trading partner for trade in goods and services," she said.
"There is not much potential for negotiations to ever come to a conclusion after such a threat is implemented. I believe we could then witness a continuing deterioration of relations between Switzerland and the EU. This loss of equivalence could therefore have a significant impact on the Switzerland economy, which goes far beyond the financial markets."
"The problem is that the EU is putting pressure on Switzerland because it does not want Switzerland to be considered as an example by Brexiteers," she said.
"It has decided to link the progress of the negotiations with the recognition of the Swiss stock markets rules that allow cross-border trading. In short, in December 2018, without sufficient progress in the negotiations, European's access to the Swiss stock exchange and securities listed in Switzerland could be threatened."
Happy Birthday, Switzerland
Fireworks, folklore and flags: August 1 is Switzerland's national holiday. The small country will be celebrating with songs and symbols. From Heidi to alphorns: we show you what makes Switzerland so special.
Image: picture-alliance/dpa/M. Gerten
The mountain calls
The Swiss and their mountains: picture postcard scenery and a hiker's paradise with cows, meadows and pastures. Switzerland boasts 48 four-thousand-meter peaks and 1161 that hit the three thousand mark. Whether it's the Jungfrau, Mönch or Eiger, if you visit Switzerland, you simply must scale the heights. Then there's the Matterhorn: 4478 meters and world's most photographed mountain.
Image: picture-alliance/Flowerphotos/M. Peuckert
Higher, faster, farther
"Uffe" means "upwards" in Swiss German, and that's where cogwheel railways, funiculars and chair lifts take you. There are more than 1800 mountain railways in this small country, among them famous ones like the Glacier Express from Zermatt to St. Moritz - one of the loveliest rail routes in the world. "The world's slowest express train" has had UNESCO World Heritage status since 2008.
Image: swiss-image.ch/Jeroen Seyffer
Of cows and bells
The cow is effectively Switzerland's heraldic animal. From cow beauty contests to cow trekking to cow carving, the national animal is ubiquitous. And, of course, no one is allowed to hurt a cow. A court decided after hearing complaints that loud cowbells could not be classified as harmful to health - at least, during the day.
Image: picture-alliance/H. Lade Fotoagentur GmbH
Meltingly marvelous
Show dairies that demonstrate cheese-making, cheese hikes and cheese workshops: Switzerland is a cheese country. The Swiss eat nearly 20,000 tons a year. And of course they hold the record in fondue-eating. Appenzeller is one of more than 450 varieties of cheese here. Its recipe remains a secret to this day, even though people have often tried to discover the source of its unique flavor.
Image: picture-alliance/dpa/Keystone/P. Klaunzer
Alpine sounds
Once mocked as the shepherds' begging horn, the alphorn is now a national Swiss symbol. The long wooden horn can produce sounds that are audible up to 10 kilometers away. The instruments come to the fore every year at the International Alphorn Festival in Nendaz, and they have even been played at the Eurovision Song Contest. The world's longest alphorn, by the way, is 47 meters in length.
Image: picture-alliance/dpa/V. Pinauda
Good-natured and friendly
The best-known dogs in the Alps are the Saint Bernards, the avalanche-detecting dogs with kegs of brandy at their necks, bred to sniff out people buried in the snow. The absolute star among Saint Bernards is Barry. Before he died in 1814, he is said to have saved the lives of 40 people. Now Barry is on display in Bern's Natural History Museum. People come from as far as Japan to see him.
Image: iriskuerschner.com
Heidi's world
She's the typical Swiss country girl: Heidi, the maiden from the mountains whose story is known globally, from Maienfeld, Heidi's village, where you can immerse yourself in her world, to Japan and the US. Johanna Spyri's novel has sold 50 million copies. In Turkey, Heidi is one of the most popular children's books ever.
Image: picture-alliance/Arco Images GmbH/De Meester, J.
The chocolate pioneers
It's thanks to Swiss chocolate-makers that chocolate is so sweet and smooth textured. In the 18th century it was sold in pharmacies as an aphrodisiac. Others considered it to be nothing but poison. Nowadays we know better. The Swiss eat 10 kilos of it per capita every year. Only the Germans eat more chocolate.
Image: picture-alliance/Arco Images/J. Kruse
As accurate as Swiss clockwork
Swiss watchmakers, with their magnifying glasses and fine-pointed tweezers, have been making a name for themselves worldwide since the 16th century - from magnificent table clocks for the nobility to chic watches for everyone. The center of the watchmaking industry lies in the middle of the Jura Mountains in towns such as La Chaux-de-Fonds, Le Locle and Biel/Bienne.
First produced in 1897 as an officers' pocket knife, the Swiss Army Knife is now even available in pink and can include a USB stick. NASA astronauts swear by the small multi-tool. The Victorinox company in Ibach makes 6 million of them annually. Here you can even create your very own knife when visiting its museum.
Image: picture-alliance/dpa/S. Kembowski
Country of tunnels
There are more than 1300 tunnels in Switzerland. Laid end to end, they would cover the distance between Denmark and Sicily. It's no surprise that the Swiss are world champions when it comes to tunnel building. The Gotthard Base Tunnel is 57 kilometers in length, the longest railway tunnel in the world. You can even take a guided tour of this spectacular structure.
Image: picture-alliance/dpa/U. Flueeler
Not just one Switzerland
In the 19th century the beauty of Switzerland led to émigrés giving its name to landscapes that reminded them of it, and to the adoption of the term elsewhere. The Saxon Switzerland in Germany (pictured) and Little Switzerland in the US are just two examples. Nowadays almost 200 regions and places worldwide bear the title "Switzerland."
