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The pro-Brexit view

Our objective, when we leave the EU, should be to aim for a Swiss model, based on bilateral accords”. British Conservative MEP Daniel Hannan, 15 December 2012, in The Telegraph.

What is the “Swiss option”? Exiting the EU, joining EFTA but not the EEA.

What would it mean for the UK?

  • The UK would manage its relationship with the EU through a framework of bilateral agreements.
  • The UK would continue to make financial contributions to the EU. According to the Economist, Switzerland’s contribution is approximately 50% that of the UK.[1]
  • The UK would enjoy some access to the single market, although only in areas where it could successfully negotiate bilateral agreements. Switzerland does not have an agreement in respect of financial services (as a result a number of Swiss banks need to operate in the EU through subsidiaries located in the EU – presently in London).
  • The UK could trade freely with the EU but would not automatically be subject to EU legislation. However, in return for access to the single market, it would be required to comply with certain single market rules.
  • There is no automatic mutual recognition of regulation – so the UK would have to meet the regulatory requirements of the EU in order to trade there.
  • Switzerland does not participate in the Common Agricultural Policy, Monetary Union, Customs Union, Common Foreign and Security Policy, EU employment legislation, or the area of freedom, security and justice.
  • In order to gain access to the single market, Switzerland was also required to accept the EU principle of freedom of movement (although it could cap migration until 2014) – so this option does not offer a solution to immigration concerns. The Swiss experience highlights the improbability (perhaps impossibility) of a State outside the EU being granted access to the free movement of goods, services and capital, without the accompanying free movement of persons.
  • No mechanism for automatically updating the bilateral agreements. Switzerland has to keep amending and adopting legislation which is the same as the EU, so that its businesses can continue to have access to EU markets.
  • The UK would have to comply with EU regulation in return for single market access, but would not be represented in EU decision-making. This problem would be even worse under the “Swiss option” than it is under the “Norway option”, as there are fewer institutional structures in place to exert “soft influence” in the EU decision-making process.
  • The UK would be free to conclude its own bilateral trade agreements with other countries, although this would need to be balanced against the risk of not being able to do so satisfactorily, as a smaller global player (e.g. the United States has ruled out a separate trade deal with the UK if it leaves the EU).
  • The Swiss position was devised in a unique context – it was intended to be a transition into the EU for Switzerland. The EU does not consider this to be viable on an ongoing basis: there is therefore unlikely to be appetite to replicate it with the UK.[2]
The view from an EU policy meeting

Around the table, there were the 28 member states, plus Norway and Switzerland. The 28 member states got to talk and the other two only got to listen, which brings a lot of warnings for my own country”. British Conservative MEP Vicky Ford.


 

  1. The Economist, The Budget that didn’t Bark, 13 February 2016 – http://www.economist.com/news/britain/21692883-why-britains-eu-budget-burden-no-longer-valid-eurosceptic-gripe-budget-didnt-bark; According to the House of Commons Library, if the UK paid the same per capita rate as Switzerland, its net contribution would fall by around 59%. House of Commons Library, Standard Note SN/EP/6730, The Economic Impact of EU membership on the UK, 17 September 2013, page 26. Including rebates, but before taking into account the other financial benefits of EU membership such as agricultural subsidies – http://www.parliament.uk/briefing-papers/sn06730.pdf.
  2. Council of the European Union, Press Release, 3213th Council meeting, Transport, Telecommunications and Energy, 20 December 2012 – “The approach taken by Switzerland to participate in EU policies and programmes through sectoral agreements in more and more areas in the absence of any horizontal institutional framework, has reached its limits and needs to be reconsidered” – http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/trans/134522.pdf.