EXPLAINED: Why Switzerland WON'T be signing draft deal with EU

In a carefully calibrated statement designed to appease an impatient European Commission, the Swiss executive on Friday said it intended to “consolidate and further develop the bilateral approach”, describing this as the "cornerstone of Swiss–EU relations".

However, in a letter (in French only) send to the European Commission, the Swiss government stressed it wanted “clarifications” on three key issues before it would sign the draft deal.

Read also: What you need to know about the draft Swiss–EU deal

The three sticking points include possible threats to Swiss measures designed to protect the country’s high wages, concerns over the deal’s impact on state subsidies and a question mark over the EU’s Citizens’ Rights Directive.

This directive is not mentioned in the draft deal but there are concerns its future adoption by Switzerland could see the country having to pay higher welfare benefits to EU citizens living and/or working in the Alpine Country.

Deal not up for renegotiation

The draft “framework agreement” (here in French) deal has been on the table since last year. The product of years of negotiations, it aims to streamline and simplify the current clunky set of bilateral agreements that govern relations between Switzerland and the EU.

The deal is key to ensuring Switzerland continues to enjoy access to the all-important EU market.

Brussels has repeatedly stated the deal is not up for renegotiation and has threatened full Swiss access to the EU stock market if it doesn’t sign. The latest deadline given by Brussels was July.

Read also: How Switzerland's direct democracy system works

But rather than giving in to EU pressure to sign, the Swiss government in December last year launched a consultation process – considered essential in a country where compromise and consensus are integral to the political process.

This consensus building is also critical in the current context given that any possible deal with the EU will almost certainly be the subject of an EU referendum, and must therefore be palatable to at least 50 percent of voters.

And now, by seeking “clarifications” Switzerland has also dodged the accusation that it is seeking the “renegotiation” that is so dreaded by the EU.

The initial reaction from Brussels on Friday was positive with EU Commission Deputy Chief Spokeswoman Mina Andreeva stating the Swiss announcement was “an overall positive development”.

“The European Commission will study the letter carefully and we will reply in due course,” she tweeted.

A more detailed response is now expected in coming days.

Read also: Just one in five back crucial deal on current relations with EU

New October deadline?

In terms of a new time frame for signing the deal, Swiss newspaper Tages Anzeiger quoted sources in Brussels as saying responses on two of the issues raised by the government – the Citizen’s Rights Directive and state subsidies – could come as early as June 17th while the issue of wages protection measures could be looked at over the summer to give Swiss unions time to get on board.

Meanwhile, the EU wants Switzerland to guarantee in June that it will sign the draft deal by the end of October at the latest, the Zurich daily reported.