Switzerland rages against EU's stock exchange ruling

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Geneva (AFP)

The Swiss government lashed out Thursday at an EU decision to give Switzerland's stock exchange only temporary access to the bloc's single market, labelling it discriminatory and "unacceptable".

The European Commission announced on Thursday that it would recognise for just one year the so-called equivalence of Swiss trading venues, which is essential to allow European banks and investors to continue to trade in the Alpine country.

According to the decision, which had been approved by 27 EU member states (without Britain) on Wednesday, an extension of Switzerland's stock market equivalence will now depend on progress in broader Bern-Brussels negotiations.

"This equivalence ... can be extended provided there is sufficient progress on a common institutional framework", aimed at replacing the current system of numerous bilateral agreements, said Valdis Dombrovskis, the European Commission vice president with responsibility for financial services and the euro.

"We will be assessing progress on that by end of next year," he added in a statement.

In a rare move, the usually composed Swiss President Doris Leuthard gave a brief but strongly-worded statement, following an emergency government meeting to discuss the EU decision.

Non-EU member Switzerland "fulfils the conditions for recognition of stock market equivalence every bit as much as the other third countries that have been granted indefinite recognition," Leuthard insisted.

"Switzerland therefore considers this limited recognition to be a clear case of discrimination," she said, adding that "the linking of this technical dossier with institutional issues is extraneous and unacceptable."

- Swiss threats -

During its extraordinary meeting on Thursday, the Swiss Federal Council, or government, concluded that "there is doubt as to the legality of (the EU) decision," the statement said.

Leuthard said the government had decided to immediately begin working to "bolster Switzerland's stock exchange and financial sector."

One of many measures being considered was the abolition of stamp duty, a tax levied on documents like cheques, receipts and marriage licences, which some economists believe hampers competitivity in the Swiss financial sector.

"Today's decision by the European Union also risks harming bilateral relations on other important dossiers," Leuthard said.

She hinted that Bern might backtrack on its recent decision to dish out 1.3 billion Swiss francs ($1.3 billion, 1.1 billion euros) for development aid to the EU, aimed at helping lower income countries in central and eastern Europe.

Switzerland's complex ties with Brussels are sewn together through a mixture of deals on trade, labour, migration and other issues.

The Bern-Brussels relationship suffered a heavy blow in 2014 when Swiss voters backed a proposal calling for the re-introduction of migrant quotas, which could have limited the number of EU citizens working in Switzerland.

The Swiss parliament last year approved a modified version of the plan to pacify the EU.