Swiss interests - How does Switzerland’s contribution to EU enlargement benefit Switzerland?

Information board
The local population is informed about projects in Poland financed by Switzerland. © SECO

Switzerland's enlargement Contribution is Switzerland’s contribution to a secure, stable, prosperous and democratic European continent. It is an integral part of Swiss foreign policy in Europe and aims to consolidate Switzerland’s relations with the EU and its member states.

Strengthening relations with the EU

Switzerland’s contribution to EU enlargement consolidates bilateral relations not only between Switzerland and the new EU member states, but also between Switzerland and the EU as a whole. The success of Switzerland’s efforts to safeguard its interests in Europe also depends on its ability to project itself as a partner aware of its responsibilities and ready to share the cost of Europe’s development. Close relations and cooperation with the EU is crucial, since about one franc in three that Switzerland earns comes from trade with the 28 EU states.

With its enlargement contribution, Switzerland establishes advisory and institutional partnerships between government authorities, non-profit organisations, trade associations, interest groups and social partners from Switzerland and partner countries. This cooperation encourages the exchange of knowledge and experiences, and strengthens Switzerland’s local presence.

Enhancing opportunities for the Swiss economy

  1. EU enlargement has opened up new export and investment opportunities for Switzerland. Despite the decline in economic growth following the financial and economic crisis in 2009, the debt crisis in the EU region and the strong appreciation of the Swiss franc, in 2013 Switzerland exported goods worth CHF 7.3 billion to the 13 youngest EU member states. This corresponds to about one third more than in 2004, the year of the EU’s first enlargement in Eastern Europe. Swiss direct investments in these have more than quadrupled following the first eastward enlargement 2004. They amount to more than 30 billion Swiss francs. The Swiss economy in general benefits from access to Eastern Europe’s growth markets. In the next few years these countries will work hard to close the enormous gap, e.g. through the development of infrastructure with the help of EU financial assistance. Rapidly growing purchasing power makes these countries interesting markets of the future for Switzerland’s export industries, notably machine manufacturers, pharmaceutical companies and the financial services sector. This directly helps to preserve existing employment and create new jobs in Switzerland.

  2. Switzerland’s enlargement contribution improves visibility and thereby also the opportunities that Swiss entrepreneurs have to take part in public calls for tender, particularly those issued through EU Structural Funds and the EU Cohesion Fund. Over the past years, various smaller and larger Swiss enterprises have received contracts from EU-financed projects either directly or indirectly. A recent survey revealed that small and large Swiss enterprises have received more than 580 contracts worth around CHF two billion from EU-funded projects in the thirteen partner countries in recent years. As Swiss companies are not required to disclose information about contracts they have been awarded, this survey reflects only a fraction of the total contracts won by Swiss companies, and the actual value of contracts placed with Swiss firms from EU funds is therefore likely to be well in excess of this amount.

  3. Switzerland has delegated some of the assessment and implemenation of projects to Swiss companies, consultants, universities, organisations and assocations. At the end of 2015, the total value of these mandates stood at approximately CHF 110 million. Project implementation will lead to numerous calls for tender which will also be open to Swiss companies.
     

Reducing security risks and promoting climate protection

Local living conditions improve as a result of the enlargement contribution projects. The ongoing widespread poverty and weak state institutions in the peripheral regions, however, harbour political risks which have a direct impact on Switzerland in the form of pressure from migration.  Environmental problems do not stop at borders. The environmental projects, many of which contribute to climate protection, are therefore of interest to Switzerland.

How are Swiss economic interests specifically taken into account?

Products on offer in Switzerland and Swiss economic know-how were taken into account in choosing the 27 areas of collaboration in the agreement with the EU (Memorandum of Understanding, MoU). Switzerland is in a position to offer products and services of high quality in these areas. Swiss companies and consultants have access to the public tenders in the partner countries and can qualify to compete.

The contribution to enlargement accounts for less than 1% of the EU resources available for the benefit of the thirteen partner countries. Swiss firms may also compete for orders from the EU Structural and Cohesion Funds. Projects implemented successfully as part of the contribution to enlargement help to promote a positive image of Switzerland in the new EU countries (and in the EU generally). Thanks to improved visibility, Swiss businesses also have a better chance to win orders from the EU Funds (“open-door effect”). In addition, the Swiss economy will profit from creation of a favourable environment in which to initiate new business relations.