EU Enlargement Deepens Swiss Isolation

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Last updated at: (Beijing Time) Thursday, October 10, 2002

EU Enlargement Deepens Swiss Isolation

After a decade of debates, the European Union (EU) has opened the door to ten new members by 2004,again casting the spotlight on Switzerland's isolation.

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After a decade of debates, the European Union (EU) has opened the door to ten new members by 2004,again casting the spotlight on Switzerland's isolation.

Switzerland's bilateral agreements will apply to the new memberstates bar the deal on the free movement of people, which will likely be renegotiated.

Unlike all the other bilateral accords negotiated between Switzerland and the EU, the agreement governing the free movement of people will have to be renegotiated following the expansion of the EU, according to local media.

The ten new members of the enlarged EU will join in the negotiations with existing member states.

In general, the Swiss government and business have welcomed theEU decision to press ahead with eastward expansion, seeing it as opening new avenues for Swiss businesses.

"The well-established political and economic conditions set between Switzerland and the EU can now be expanded to new markets," which was the Swiss Economics Ministry's response.

By expanding into Central and East European countries, such as Estonia, Hungary, Latvia, Poland and Slovakia, the EU is expected to add some 75 million people to its existing population of 400 million.

And because EU laws, and market conditions, will hold sway in the new members states, Switzerland will have fresh trading opportunities, even though it is not a member of the union.

Swiss business groups, particularly those representing small and middle-sized firms, have already begun building links to countries such as Lithuania, Slovenia, Hungary and Poland.

Marcel Ledergerber, head of Swiss Export, was very upbeat aboutthe Commission's announcement. "East Europe is a giant market withmillions of potential customers," Ledergerber said.

However, Ledergerber warns that many Swiss firms have still to grasp the coming opportunities, pointing out that many German firms, unlike their Swiss competitors, have long been active in Eastern Europe.

For an export-dependent country such as Switzerland, the EU's new members may be essential for its long-term prosperity. Every tenth small or middle-sized Swiss firm is reliant on exports, much of them to Europe.

Political Isolation

The European Commission's recommendation for expansion, which still faces several key hurdles, including a referendum in Irelandand in several of the applicant states, also highlights Switzerland's increasing political isolation.

The country is now the member of one of Europe's most exclusive clubs, that of non-EU states, which by 2004 will count among its biggest members Bulgaria, Romania and Turkey.

Curt Gasteyger, professor-emeritus of the Graduate Institute ofInternational Studies in Geneva, holds that Switzerland's growing isolation is a factor that will not diminish with time.

"The blind spot, politically, in the center of Europe will be Switzerland.. and that must certainly have an effect on both Switzerland's European position, as well as on the Swiss perception of Switzerland's role in the new Europe," Swiss Radio International quoted Gasteyger as saying.

Gasteyger also argued that Switzerland's future isolation within the EU will not be defensible through claims of its economic superiority.

As recently as March 2001, the Swiss voted against even openingtalks on joining the EU, partly because of fears that the country's relative wealth could be siphoned off by the needs of Europe's poorer member states.

Gasteyger said "Let us face it, Switzerland today is in a much weaker position economically and financially than it was several years ago. We have seen, last year and this year, serious shocks and setbacks when it comes to Swiss economy.

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