Several years on from the financial crash, public sympathy for bankers remains at a low ebb, so perhaps it isn’t all that surprising that the Remain camp’s warnings of the damage Brexit would do to the City failed to swing the vote on June 23. Even some of the handpicked representatives of the In campaign couldn’t bring themselves to speak well of financial services. Given a prime slot on the BBC to oppose Brexit, TUC chief Frances O’Grady elected to make her case against “greedy bankers”.
After the vote, however, cooler heads should prevail. The Financial Times reports that the consensus in the City is that staying in the EU single market through a Norway-style arrangement no longer seems to be an option. Instead, a bespoke ‘Switzerland+’ deal seems to be the most favoured outcome.
Switzerland does not have full access to the single market. The vast majority of services – including finance – are not covered by its agreements with the EU, despite years of trying. The City hopes for a Switzerland+ deal to fill this yawning gap, but it would still come with strings attached.
For a start, we would probably have to follow EU rules. In general, Switzerland has to adopt the same or equivalent product regulations as the EU – and it gets no vote on what those rules are. Moreover, Switzerland maintains its access to EU markets only insofar as it keeps up with EU regulation. When Brussels changes its rules, Switzerland loses access – until it amends its laws too.
We wouldn’t be free of our obligations to the European Court of Justice, either. As part of Switzerland’s deals, it must respect the ECJ’s opinions on internal market law. While these are theoretically just “recommendations”, the reality is that Switzerland has to adapt its own legislation to reflect the court’s interpretation of EU law.
In all likelihood, we would also have to follow Switzerland in accepting free movement of people. Any attempt to wriggle out of this would probably be doomed to fail. A 2014 referendum in Switzerland resulted in a vote to restrict immigration – and a severe headache for politicians as Brussels cried foul.
Switzerland’s relations with the EU consist of a set of bilateral treaties, all beneath a “guillotine clause”. If Switzerland ends one agreement, it ends them all. Having made its position clear soon after the immigration referendum – “The core principle of the free movement of persons… is not simply ‘negotiable’, as some tend to believe” – the EU isn’t budging.
The end result may well be that the Swiss are forced to vote again to decide between restrictions on immigration or prized access to the European market. If British negotiators were equally unable to win a Switzerland+ opt-out from free movement, what price a referendum re-run here?