The Strategist

European Commission warns Switzerland about risk of losing access to EU financial market

06/18/2019 - 16:31

The EU authorities will not extend the existing agreement with Switzerland on the "equivalence" of the country's stock exchanges to the EU standards, and the Swiss authorities are not ready to sign a new agreement.

Following the meeting of the European Commission on Tuesday, June 18, representatives of the EC noted the "lack of progress" in negotiations with the Swiss authorities to conclude a new agreement.

In a commentary to Reuters, an unnamed high-ranking EU official noted that this statement means that the European Commission will not renew the agreement on the equivalence of the status of Swiss exchanges to the European Union's stock exchanges. The agreement expires on June 30th. The EC official statement on this issue is expected to be published at the end of the week.

In the absence of a new agreement in this area, the Swiss stock exchanges will lose free access to the EU financial market. The current situation partly reflects the problems that the UK is facing in the event of withdrawal from the European Union without a deal.

The EU authorities are actually seeking to force Switzerland into a new agreement that will affect not only the stock exchanges, but also other sectors of the country's economy, under the threat of denying access to the EU financial market. In early June, the Swiss Federal Council announced that it would “require clarification” of the details of the new agreement that the European Commission proposes to sign.