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Switzerland’s Brexit Moment

Many in Switzerland have failed to recognize that their exorbitant privileges vis-à-vis the European Union could not continue. The Swiss government’s recent withdrawal from talks on an EU framework agreement could reduce the country’s single-market access and prompt a fundamental rethink of its relationship with the bloc.

BRUSSELS – The Swiss government’s recent withdrawal from long-running negotiations on a framework agreement with the European Union has triggered a deep crisis in bilateral relations. For the EU, the fallout is manageable: economic relations will erode but the Union will carry on. For Switzerland, the consequences could be more dramatic. With Switzerland’s future access to the EU’s single market in jeopardy, its walkout might now require a Swiss rethink of its relationship with the bloc almost as fundamental as the United Kingdom’s after the 2016 Brexit referendum.

Switzerland is not an EU member state, but in many respects it comes close. Through some 120 bilateral agreements, Switzerland is a member of the border-free Schengen Area, is closely integrated with the EU in areas such as transport, research, and the Erasmus student-exchange program, and enjoys full access to the single market in sectors from finance to pharmaceuticals.

All told, Switzerland probably benefits more from the single market than any other European country, and pays little in return. A 2019 Bertelsmann Stiftung study found that the single market boosts Swiss annual per capita income by €2,900 ($3,515) per year – well above the EU average of €1,000 – whereas Switzerland’s corresponding financial contribution (when it is paid) in effect cost the Swiss less than €14 per capita per year.