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Swiss activate plan to defend stock market against EU threat
[GENEVA] Switzerland on Friday activated a plan to protect its stock market should European Union not renew the Swiss stock exchange's access to the bloc's single market.
The European Commission announced late last year that it would limit to one year its recognition of the so-called equivalence of Swiss trading platforms, which is essential to allow European banks and investors to continue to trade in the Alpine country.
The deadline for the EU to grant the renewal is Dec 31.
In a decision that infuriated Bern, Brussels had tied the renewal to progress on simplifying Switzerland's complex bilateral ties with the EU.
Earlier this week, the EU said there had not been enough progress to justify a renewal of the equivalence.
In a statement, Bern said it had no choice but to act.
"The market needs clarity in order to adapt to the various scenarios in good time," Switzerland's Federal Council said in a statement.
Under the plan which came into force on Friday, Switzerland is requiring all foreign trading platforms which allow trading of Swiss shares to apply for formal "recognition" from Bern.
The measure is designed to create a way for EU-based platforms to still trade shares on the Swiss exchange, even without approval from Brussels.
The plan will be voided if Brussels renews the Swiss market's equivalence status before the end of the year.
"It is designed in such a way that it has no practical effect if the European Commission extends the stock market equivalence before the end of 2018," the government statement said.
It stressed that Bern "continues to believe that Switzerland meets all the conditions for unrestricted recognition by the EU."
The European Commission, which handles the negotiations with Bern for the EU, said it "taken note" of Switzerland's decision.
"We will examine and assess the situation ... and discuss possible next steps ... in the coming days and weeks," a statement added.
Some have speculated that the EU is driving a particularly hard bargain given the ongoing Brexit talks and that issue may be easier to resolve if Brexit tensions ease.
Switzerland's complex ties with Brussels are sewn together through a mixture of deals on trade, labour, migration and other issues.
The Bern-Brussels relationship suffered a heavy blow in 2014 when Swiss voters backed a proposal calling for the re-introduction of migrant quotas, which could have limited the number of EU citizens working in Switzerland.
The Swiss parliament in 2016 approved a modified version of that plan to pacify EU relations.