Swiss to vote on EU talks

BERNE, Switzerland -- Swiss voters going to the polls this weekend are expected to reject a proposal calling on the government to launch immediate talks with Brussels on European Union membership.

In the run-up to the poll, both the government and parliament have urged the electorate to cast a no-vote, saying Switzerland and the EU should first implement a series of newly agreed bilateral accords.

Those accords - which still must be ratified by the 15 EU member states - cover a broad range of sectors, including the free movement of people, trade and agriculture as well as road and rail transport.

The government says its long-term strategic goal remains full EU membership, but it fears that a yes-vote at this point in time could endanger EU ratification of the bilateral accords.

Swiss voters will be able to have their say on the success or failure of the bilateral accords seven years after implementation. Pro-Europe politicians and business leaders hope that the situation will be more relaxed by then and that a decision on full membership should become less emotional.

How landlocked Switzerland and its 7 million inhabitants should go about cementing ties with its neighbours without sacrificing its cherished neutrality and centuries-old history of direct democracy has long been a thorny issue dividing the country.

The last time the question came to a head was in 1992, when more than half of Swiss voters said no to joining the European Economic Area, which groups the EU and its key trading partners.

That no-vote not only highlighted deep divisions between French-speaking western Switzerland, which favours EU membership, and the rest of the country but also burned itself deeply into the consciousness of the Swiss government.

Ever since that vote, the government has treated very carefully over the EU issue, trying to find solid support for its European policies before holding any negotiations with Brussels.

With the Swiss economy humming along comfortably, and even appearing in somewhat better shape than its key European trading partners, Swiss voters still feel they have little to gain and much to lose from closer ties with the EU. Inflation is lower than the European average --consumer prices rose a scant 0.8 percent in February from a year ago -- and economic growth, at least for now, is higher.

Switzerland's unemployment rate hovers around 2.0 percent. Income tax rates tend to be lower than in the rest of Europe, and the country's value added tax is now at exactly half the EU's minimum level of 15 percent. And with the European single currency continuing to languish against other key currencies, few Swiss would see the benefits of giving up their traditionally strong currency, the franc.

Reuters contributed to this report.

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