Some officials in Brussels call it “the Swiss mess”. Switzerland may be out of the EU club, but in some ways requires more attention from Brussels than your average member state of 8m.

The Alpine nation has engineered a unique approach to accessing parts of the single market through a 120-odd bilateral agreements. It has survived many tests, seemingly against the odds. But that bespoke arrangement is coming under increasing strain. 

Brussels wants Switzerland to bring its jumble of deals under a more orderly “institutional framework”. Signing up would mean Bern is effectively subject to the rulings of EU courts in areas where it is applying EU law — a role for “foreign judges” that it has long resisted.

Lately the EU have tried to show this resistance carries a price. A precedent was set late last year when Brussels gave Swiss stock exchanges just a temporary 12-month “equivalence” deal to keep trading in Europe. The Swiss government was expecting an unlimited deal after paying into Europe’s cohesion funding pot. But Brussels, frustrated at the stalled talks over the EU-Swiss relationship, is keeping one of its closest third countries on a tight leash. The Brits, meanwhile, are watching closely.

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Will the Swiss start playing ball? Not yet. If anything, relations with Bern could yet sour further.

The latest spat is over the Swiss approach to Europe’s tough new data protection laws — an area where the country is already considered equivalent to EU standards. Fresh from the embarrassment over its stock exchanges, the government is debating reopening its own privacy standards in a way that will reduce, rather than ramp up, the burden on business.

Any major divergence from the EU’s landmark data protection regime (GDPR) would put Switzerland at risk of being stripped of its prized “adequacy status”, which allows personal data to flow freely into the EU.

On the data issue, the Brits are already proving more compliant than the Swiss, promising to wholesale adopt EU standards before Brexit in a bid to get an adequacy deal sealed after 2019. Whether the Europeans are as quick to award it is an open question. As with the Swiss, much will depend on the political mood.

Chart du jour: Italians bonds not bothered

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What elections? Italy’s massive bond market is untroubled by its looming March vote ( chart above) and Goldman Sachs is worried investor complacency is setting in. The investment bank is predicting a “hung parliament and a broad coalition government of left, right and centre parties . . . the road to such an outcome could be quite bumpy”.

The best of what we’re reading

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Macron: L’homme de Davos 
An English-speaking French president told the world’s elite in Davos that “France is back at the core of Europe”, celebrating his domestic economic reform agenda and launching a spirited defence of globalisation. The verdicts are in: “Macron’s new ‘spirit of conquest’” (Le Monde); “The caretaker of the world”(Handelsblatt); “Macron’s 10 year plan for Europe”(FAZ).

Unruly law
Romania is the latest country to be accused of backsliding on the rule of law by the European Commission, which has warned Bucharest against “backtracking” on conditions for monitoring its judicial reform and corruption.

A half-way Brexit house
Forget “managed divergence”, the UK is better off striking a deal on goods after Brexit, write John Springford and Sam Lowe at the Centre for European Reform.

Draghi’s day
It’s ECB time again and Mario Draghi is under pressure to quicken up the pace of the bank’s long-awaited (if slow and steady) removal of the QE punch bowl. Politico’s Pierre Briancon takes a look at the great shuffle at the top of the governing council, where four big jobs will need to be filled over the next 18 months.

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The Rise and Rise of Viktor Orban
A fascinating magazine profile of the Hungarian premier by the FT’s Neil Buckley and Andrew Byrne, including a brilliant anecdote about how his student activist group was helped along by a certain George Soros. 

Czech elections
Tight polls, dirty tricks and populist politics — the Czech presidential election is reaching its climax. The Guardian reports

Germany moves against Facebook
In an interview with the FT, Germany’s competition regulator has threatened to restrict how Facebook amasses data from millions of users. Such a move would be an unprecedented intervention in the social network’s business model.

Coming up on Thursday 
The European Court of Justice will rule whether or not Austrian privacy activist Max Schrems is allowed to sue Facebook over alleged breach of privacy laws. Schrems is interviewed in Süddeutsche Zeitung this morning. Back in Brussels, the EU is playing host to its first ever education summit

Email: mehreen.khan@ft.com
Twitter: @mehreenkhn

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