BRUSSELS (Reuters) - Renewal of Swiss stock exchanges’ temporary access to the European Union depends on Bern reaching a deal with Brussels on a new treaty to govern relations, two EU officials said on Thursday, in talks that could have implications for Brexit.
All EU governments except for Britain approved on Wednesday a European Commission proposal to recognise shares trading on the SIX Swiss Exchange and BX Swiss as equivalent to exchanges based in the EU and vice versa for one year from Jan. 3.
Continued access into 2019 can only be granted if Switzerland makes headway on agreeing to replace more than 100 bilateral accords with a new treaty, officials said.
That is to ensure Switzerland adopts relevant EU laws in return for enhanced access to the bloc’s single market.
“We link renewal to progress on institutional negotiations by the end of 2018,” said an EU official, referring to the treaty talks. “Right now, there is no progress.”
The EU’s ties with Bern have been strained since Swiss voters in 2014 demanded quotas on EU immigration, which would break EU rules over access to its lucrative internal market.
The Swiss government threatened on Wednesday to retaliate if the European Union did not give Swiss stock exchanges the same regulatory status as exchanges in other countries.
Relations have improved since the Swiss parliament last year adopted a system giving people registered as unemployed in Switzerland first crack at open jobs, instead of limits on EU workers, but a 2017 deadline for agreeing the new treaty was not met.
In a sign of Brussels’ willingness to use its economic clout as leverage, the original plan was to grant open-ended access for SIX Swiss Exchange and BX Swiss, but was switched to a one-year period, pending renewal.
Only Britain abstained in Wednesday’s vote. It lobbied for full Swiss access, officials said, reflecting London’s bid for preferable access for its own financial services after the country leaves the European Union.
Stock exchanges in Hong Kong, Australia and Singapore have so-called equivalency agreements with the European Union, allowing trading to go on unhindered with the bloc, but an EU official stressed it was not a given for any country.
“It is not a human right to be declared equivalent, it is on a case-by-case basis, laid down by regulation,” a second official said. “Switzerland is a special country for the financial integrity of the EU internal market.”
Reporting by Robin Emmott; Editing by Alastair Macdonald