Swiss-EU bourse battle breaks out over stalled treaty

By Francesco Guarascio and Michael Shields BRUSSELS/ZURICH (Reuters) - Investors in the European Union and Switzerland will lose direct access to each others' stock exchanges from July 1 in an escalating row over a stalled partnership treaty. Frustrated with Swiss foot-dragging, the European Commission will not propose extending the equivalence regime that lets EU investors trade on Swiss bourses, effectively ending it as of July 1, an EU diplomat told Reuters on Friday. Friday was the deadline for the Commission to make such a proposal, but it will refrain from doing so because Bern did not endorse a partnership treaty with the EU that had been negotiated for years, the diplomat said.

Reuters June 22, 2019 01:06:37 IST
Swiss-EU bourse battle breaks out over stalled treaty

SwissEU bourse battle breaks out over stalled treaty

By Francesco Guarascio and Michael Shields

BRUSSELS/ZURICH (Reuters) - Investors in the European Union and Switzerland will lose direct access to each others' stock exchanges from July 1 in an escalating row over a stalled partnership treaty.

Frustrated with Swiss foot-dragging, the European Commission will not propose extending the equivalence regime that lets EU investors trade on Swiss bourses, effectively ending it as of July 1, an EU diplomat told Reuters on Friday.

Friday was the deadline for the Commission to make such a proposal, but it will refrain from doing so because Bern did not endorse a partnership treaty with the EU that had been negotiated for years, the diplomat said.

The move by its biggest trading partner will prompt retaliation from Bern, which last year drew up contingency plans to block by decree trading of Swiss shares on EU-based exchanges.

"Should the EU not extend Swiss exchanges' access to the EU market Switzerland would activate the protective measures decided on 8 June 2018 with effect from the end of June," a government spokesman said by email.

The blue-chip Swiss Market Index ended down 0.6% but off session lows shortly before the market close.

BREXIT IN THE BACKGROUND

Bern's request this month for "clarifications" on three areas - protecting wages, regulating state aid and defining the rights of EU citizens in Switzerland -- is seen in Brussels as demands to reopen the treaty text, which the EU refuses to do.

Granting stock market equivalence is the EU's major leverage in trying to get the Swiss to finally sign off on the pact, but Switzerland's foreign minister has said repeatedly Bern will not be rushed into any deal although it remains open for talks.

The Swiss measures could make volume swell on the SIX Swiss Exchange -- Europe's fourth-largest -- at least temporarily.

Exchange industry officials say EU investors would still be able to trade Swiss shares, but only through a broker that is a member of the Swiss exchange in Zurich, rather than having a choice of exchanges like Aquis, Cboe and Turquoise that help to drive down prices.

These other platforms now account for nearly a third of the trading volume for Swiss stocks including heavyweights like Nestle, Roche and Novartis.

Although the loss of trading access granted under an equivalence regime would also have broad financial repercussions for the 28-country EU, it was seen as inevitable in Brussels after years of inconclusive negotiations.

The hardening of the EU stance is also partly linked to parallel talks under way with Britain over Brexit, as a lenient approach to the Swiss could encourage London to seek softer terms.

The treaty would have non-EU member Switzerland routinely adopt EU single market rules, create a more efficient platform to resolve disputes, and pave the way for new trade deals, such as for an electricity union.

But ahead of Swiss parliamentary elections in October, it has drawn resistance from across the Swiss political spectrum for infringing national sovereignty.

(Reporting by Francesco Guarascio in Brussels and Michael Shields in Zurich; Editing by Andrew Cawthorne and Louise Heavens)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

China bans German pork imports after African swine fever case
Business

China bans German pork imports after African swine fever case

SHANGHAI (Reuters) - China banned pork imports from Germany on Saturday after it confirmed its first case of African swine fever last week, in a move set to hit German producers and push up global prices as China's meat supplies tighten. China's ban on imports from its third largest supplier comes as the world's top meat buyer deals with an unprecedented pork shortage after its own epidemic of the deadly hog disease. The ban on Germany, which has supplied about 14% of China's pork imports so far this year, will push up demand for meat from other major suppliers like the United States and Spain, boosting global prices.

Libya's Haftar committed to ending oil blockade, U.S. says
Business

Libya's Haftar committed to ending oil blockade, U.S. says

CAIRO (Reuters) - Libyan commander Khalifa Haftar has committed to ending a months-long blockade of oil facilities, the U.S.

AstraZeneca resumes UK trials of COVID-19 vaccine halted by patient illness
Business

AstraZeneca resumes UK trials of COVID-19 vaccine halted by patient illness

By Michael Holden LONDON (Reuters) - AstraZeneca has resumed British clinical trials of its COVID-19 vaccine, one of the most advanced in development, after getting the green light from safety watchdogs, the company said on Saturday. The late-stage trials of the experimental vaccine, developed with researchers from the University of Oxford, were suspended this week after an illness in a study subject in Britain, casting doubts on an early rollout