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The Swiss-European economic success story in danger

Client

vbw – Bavarian Industry Association e. V.

Year

2022


The assignment

The bilateral agreements that laid the foundations for close economic cooperation between Switzerland and the Germany were signed around the turn of the millennium might not be continued. In 2021 Switzerland broke off negotiations for a framework agreement designed to comprehensively govern its relations with the EU.

This study examines the institutional and economic ties between Switzerland and the EU and quantifies the potential economic consequences should the framework agreement fail.

Our approach

First, the study examines the complex structure of Switzerland's institutional relations with the EU. We then assess the economic relationships and analyse to what extent they are profitable for both sides.

The next step is to compare the status quo with alternative scenarios in which no or limited agreement is reached: For example, we consider a “relapse” to the standardised rules of the World Trade Organization or the agreement on a Brexit-like deal.

The results highlight the threat of economic damage associated with the continuation of the political conflict between the Swiss government and the EU.

Core results

At present Switzerland has over 120 bilateral agreements with the EU. Foreign trade relations between them are particularly close. For example, European demand within Switzerland generates almost 93 billion euros of gross value added and, secures the employment of 549,000 people.

From a Swiss point of view, Germany is the largest trading partner: 45 billion euros of gross value added (7 percent of total Swiss gross value added) and 268,000 employees can be traced back to German demand.

Similarly, for Germany Switzerland is also an important trading partner. In Germany, 33 billion euros of gross value added and the employment of 440,000 people depend on foreign trade with Switzerland.

This gross value added and employment, as well as investment and research cooperation, are at risk in the absence of an agreement between the EU and Switzerland. Although Germany would be less affected than Switzerland by this loss, it is nevertheless in the interest of both parties to find a solution to the current stalemate.

Links and downloads

The following documents and information can be found on the vbw website:

Study (PDF, German)

More information at vbw

Project team: Jakob Ambros, Dr Michael Böhmer, Philipp Kreuzer, Mathis Vornholt, Johann Weiß, Eva Willer

 

Stand: 27 June 2022

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Dr Michael Böhmer

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About us

Prognos – Providing Orientation.

Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.

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