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What happens next in UK-EU saga? Look no further than Switzerland?

Denis MacShane / Jan 2021

Image: Shutterstock

 

There is a pointless debate about what the future holds now for Britain outside Europe. The truth in reality is that no-one knows. We do however have one good example of life for a well-established democracy and successful economy in Europe that also said No to the EU and has been fretting over what its relationship should be for nearly three decades.

In 1992, the Swiss in a referendum said No to joining the European Economic Area set up by Jacques Delors for mainly neutral nations like Sweden, Norway, Austria, Finland as a kind of waiting room to full EU membership.

In the 1970s there was bi-partisan agreement on entering the EEC with Ted Heath and Margaret Thatcher supporting the Yes vote along with Harold Wilson and John Smith in the 1975 referendum

But once political parties feel they can instrumentalise Europe for party or factional advantage  it is hard to win any plebiscite. Most of the 21st century referendums in various EU member states on a key EU question from the Euro, to the constitution, to the Lisbon Treaty and finally our Brexit plebiscite ended in a majority saying No.

The Swiss faced the same reluctance to embrace Europe in 1992. Instead the Swiss negotiated patiently one by one more than 700 bi-lateral agreements to allow a great deal of access to the Single Market for Swiss companies and universities as well as joining Schengen and the European Arrest Warrant.

The biggest hurdle to cross was freedom of movement. As in Britain, and many other European nations, immigration politics have been toxic for many years. A Swiss party, the Swiss Peoples’ Party (SVP) , grew in strength between 1990 and 2020 banging drums against European, African and Muslim immigration.

It became the biggest party, financed by one of Switzerland’s richest businessmen. But its business supporters fell away when the party insisted on a  ban on freedom of movement.

27 per cent of the Swiss population is foreign-born. Swathes of the economy would collapse if EU workers were banned from tourism, construction, hospitality, agriculture, cleaning, retail, hospitals or health and old-age care

In September 2019 the SVP was defeated in a referendum on freedom of movement. This has not solved the Swiss-EU relationship as the Swiss don’t want to take orders from any external power including the European Court of Justice.

Soon enough the UK like the Swiss will have to open negotiations covering the 80 per cent of the 21st century economy of immaterial capitalism represented by the City, international lawyers, consultants, e-commerce, universities, and all creative artists.

Already as Andrew Bailey, the Governor of the Bank of England, noted 5-7,000 City bankers and traders have had to relocate to EU capitals to keep doing business in the EU.

Corporate lawyers in London have been told that while they can keep advising clients on UK law they cannot operate professionally in Europe unless they have a physical presence in an EU city.

Negotiations on all aspects of the UK’s economic relationship with the EU and access for UK citizens to operate, live, or retire in the EU  will grind on for years as they have done between Bern and Brussels. Boris Johnson and Sir Keir Starmer should take a look at Switzerland as they find that far from Brexit being done it is only just beginning.

 

Denis MacShane

Denis MacShane

January 2021

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