ZURICH (Reuters) - Several political and economic issues remain open in neutral Switzerland's talks on future ties with the European Union, the Bern government said on Wednesday, linking progress in negotiations to whether it continues to pay into the EU budget.
Talks on forging a comprehensive new treaty that would replace a patchwork of more than 100 bilateral accords easing Swiss access to the single market have been going on for three years, with a breakthrough still elusive.
Switzerland's coalition cabinet "wishes to build on the bilateral approach with the European Union", it said, noting this had regularly won popular support in referendums and had helped make the EU the main Swiss trading partner.
But it added that differences remain on the institutional rules for agreements on market access, especially in regard to the dispute settlement procedure, state aid and some aspects concerning the free movement of people.
It linked progress in the talks to the prospects of Switzerland voluntarily continuing its so-called "cohesion payments" to the EU budget that in the past have helped fund development projects in eastern European EU members.
"The question of this autonomous contribution to cohesion will be examined in due course as part of an appraisal of all EU dossiers," it said.
Switzerland's drive to clinch a treaty putting its EU ties on firmer footing has run aground as mainstream conservative parties get cold feet ahead of Britain's divorce talks with the EU, Reuters reported this week.
A new treaty could clear the way for closer ties in fields including financial services and power markets, but fear that any deal might anger Swiss voters who get a final vote under the country's system of direct democracy has put the project on hold.
Reporting by Michael Shields; Editing by Toby Chopra