Frank Stocker, financial editor of German national daily newspaper Die Welt, described the European Commission as a “big loser” in the heated standoff after Switzerland blocked access to Swiss stocks from being traded at EU stock exchanges without special permission. The row between both sides escalated after their previous trade agreement, which allowed the Swiss access to the larger EU market, expired at the end of last month without a new deal in place. As discussions between the EU and Switzerland collapsed, the EU said it would now refuse to recognise the Swiss stock market’s rules as “equivalent” to its own. Switzerland fired back by banning almost 300 shares in Swiss companies – including big names such as Nestle and Zurich Insurance.
Mr Stocker said the EU had fallen flat after trying to put pressure on Switzerland to agree a new deal over how future trade relations should continue.
The Commission has urged Bern to endorse an arrangement on its overall relations with the bloc, which was agreed in November after years of negotiations.
While the Swiss government has proposed a new system that would require foreign stock exchanges to get Swiss permission to host trading in Swiss stocks.
Mr Stocker said: “The Brussels EU Commission wanted to be particularly smart and tactically crafty, but without appearing too aggressive.
“They believed they had found the ideal leverage in a recent dispute with Switzerland – and now have to realise that they have shot themselves in the foot.”
He continued: “The EU is the big loser.”
Despite the dispute remaining unresolved, Swiss stocks traded without major glitches on the first day of the ban yesterday as flows shifted to the domestic market from EU exchanges.
Monday saw 11 of Switzerland’s top 20 stocks by market capitalisation – including Nestle, Roche, Credit Suisse and Novartis – record below-average volumes across all trading platforms, an analysis of Refinitiv data showed.
But 15 of the top 20 by market size experienced a big jump in the amount of activity registered on the Swiss stock exchange, SIX.
Mr Stocker predicted EU investors will be the ones to lose out from the ban.
He said: “As Nestlé & Co. are no longer traded in the EU, EU investors are likely to trade them again in Switzerland.
“But more than that, they practically have to trade them there, because there is no other financial centre that would be easily accessible to them.
“As a result, the Swiss stock exchange does not dry out, it even receives additional inflows of capital – the opposite of what the EU wanted to achieve.
“The whole thing is at the expense of investors who hold Swiss shares.”
In a meeting of top negotiators on June 12, Brussels offered Switzerland clarifications on key issues raised by Bern on future relations.
But Swiss Foreign Minister Ignazio Cassis said his nation needs more time to strike a deal with Brussels and said they would not be rushing into signing a new deal.
He said this is “because we have a different political structure and we cannot simply decide in government and that’s it”.
Additional reporting by Monika Pallenberg