(Bloomberg) -- Local officials in Switzerland have reservations about a proposed deal with the European Union, in part over an expanded role for the bloc, the president of the conference of cantonal governments, Benedikt Wuerth, told newspaper Neue Zuercher Zeitung.
The planned modernization of the free-trade agreement between the trading partners could open the door to EU intervention in Swiss affairs, Wuerth said. The cantons also are concerned that state aid -- subsidies, tax reductions, state participation in companies -- will need to be reported to and approved by a monitoring authority, he said.
The proposed deal doesn't cover issues about EU citizenship. Should questions arise, an arbitration court will decide. While such a step doesn't have any “material” ramifications, it could create a “psychological” issue, Wuerth said.
Switzerland and the EU are battling over a “framework” agreement to replace the patchwork of 120 treaties that now govern relations. The EU has made clinching an accord a prerequisite for further recognition of the Swiss bourse under MiFiD II. The pact is politically unpopular in Switzerland.
The Swiss government took no action on the proposal when it was presented on Dec. 7, instead announcing a national debate on the issue. Swiss cantons will present their final assessment by the end of March.
The proposed deal needs approval from 18 of Switzerland's 26 cantons.
To contact the reporter on this story: Mara Bernath in Zurich at mbernath1@bloomberg.net
To contact the editors responsible for this story: Lukas Strobl at lstrobl@bloomberg.net, Steve Geimann, Ross Larsen
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