Swiss cabinet ministers will be in Brussels on Wednesday to finalise a new set of bilateral accords with the European Union.

The two sides reached agreement on the nine dossiers after lengthy wrangling, but uncertainties remain over the Schengen accord on cross-border crime and an EU savings tax directive.

The meeting is set for 11 o’clock at Breydel, in the European Commission building. Attending will be Swiss president Joseph Deiss, foreign minister Micheline Calmy-Rey, and finance minister Hans-Rudolf Merz.

Irish deputy prime minister Mary Harney, the president of the European Commission, Romano Prodi and the foreign affairs commissioner, Chris Patten, will be representing the EU.

The meeting is expected to be brief – less than an hour - and will involve the two parties giving their official agreement to the compromise accord, reached on May 13, in which the EU agreed to guarantee Swiss banking secrecy in exchange for Bern’s cooperation in taxing EU residents’ savings.

This should signal the end of the political negotiations on the second cycle of bilateral agreements.

Wrangling

Contrary to the first round of bilateral agreements, which took seven years to negotiate, this latest round took just two years. But it was characterized by wrangling between the two sides.

The final act will be the signing of the nine agreements, which include closer cooperation between the EU and Switzerland on security and asylum, the fight against international smuggling and customs fraud.

This is expected to take place in the autumn after the finishing touches have been applied.

Officials have said that the process might be further delayed as the accords have to be translated into all the official languages of the EU, which have increased since the ten new members joined.

It will be up to the European Council – which represents the member states’ national governments – to give the package the final go-ahead.

The accords should then come into force immediately and for the EU, at least, the process will come to an end.

Uncertainties

But there are still some issues that need to be resolved and which could potentially threatened the success of these landmark agreements.

For its part, the EU still has to finish negotiations with other external countries, especially with associated territories such as the islands of Jersey, Guernsey and the Caribbean.

These negotiations are said to be progressing but last minute problems cannot be excluded. The EU has fixed a date of June 30 by which time it wants the directive adopted.

Before that European ministers are set to have what is expected to be a stormy meeting on June 2 in which they will be approving two annex declarations, which are linked to the compromise deal reached with Switzerland.

The first one grants Luxembourg the same rights as Switzerland on banking secrecy and the second, put forward by five countries – France, the Netherlands, Italy, Sweden and Spain – serves to remind members that the objective of the EU savings tax directive is the exchange of information and not the deduction at source for taxes.

Ratification in Switzerland

Switzerland has yet to decide on the procedure for ratifying the accords – it could be that they will be put to referendum.

The accord most under threat is the Schengen agreement. The rightwing Swiss People’s Party has already announced its intention to hold a referendum on Schengen.

For this reason, Switzerland has been granted a two-year deadline to apply present and future legislation.

But a referendum on whether to extend the free movement of people accord to the ten new members of the EU is more risky, as it would call into question the first round of the bilateral agreements.

swissinfo, Barbara Speziali in Brussels

The Swiss government has chosen its representatives to finalise a new set of bilateral accords with the European Union in Brussels on Wednesday.

The Swiss president, Joseph Deiss, the foreign minister, Micheline Calmy-Rey, and the finance minister, Hans-Rudolf Merz, will attend the meeting.

The move comes after EU foreign ministers officially approved the accords at a meeting on Monday.

Three of the nine accords negotiated between Switzerland and the EU deal with closer cooperation on security and asylum, the fight against international smuggling and customs fraud, and taxation of EU residents’ savings income in Swiss banks.

The Swiss government also wants to open up the labour market to the ten new EU member states.

The agreement has followed years of wrangling. But opponents in Switzerland, who have threatened to call a nationwide vote, could still derail the process.

Last minute deal

Negotiations between Switzerland and Brussels have dragged on for almost two years on the issues of taxation and Swiss membership of the Schengen and Dublin accords, which cover customs fraud and closer cooperation on security and asylum.

A final compromise on these issues was only reached last week.

The bilateral treaties will give Bern membership of the Schengen agreement on cross-border crime, but with an opt-out on sharing information about tax evasion, which the Swiss were concerned would threaten banking secrecy.

In return, Switzerland will sign up to the EU’s savings tax directive and levy a withholding tax on EU residents’ savings income in Swiss banks.

Other areas covered by the bilaterals are the environment, education and training, free trade of processed agricultural products, film production and distribution and access to pan-European statistics.

Two other issues – granting access to the Swiss labour market for the ten new EU members and Switzerland’s contribution to a special fund to help the least prosperous EU states – have been added to the package.

Ratification

Even if political agreement is reached on Wednesday, it is by no means the end of the story.

In Switzerland, ratification could still be some way off as the bilateral accords will still have to be approved by parliament.

Meanwhile, the rightwing Swiss People’s Party has already announced it will scrutinise the package, especially the Schengen agreement.

The People’s Party considers the Schengen deal to be a treaty with a foreign state, requiring a nationwide vote.

The centre-right Christian Democrats and the Social Democrats have for their part called for a vote on the complete set of bilateral accords.

Brussels was anxious to conclude negotiations with Switzerland by the end of June so the taxation of savings directive could come into force on January 1, 2005.

swissinfo, Barbara Speziali in Brussels

Switzerland’s long-standing tradition of soldiers keeping their rifles at home looks set to continue – at least for the time being.

Despite the use of an army-issue rifle in a massacre in a local Swiss parliament in 2001, the defence ministry says it will maintain the practice.

“Everybody who has served in the army is allowed to keep their personal weapon, even after the end of their military service,” the defence ministry said in a statement.

The ministry reiterated its position after it was revealed that the government is planning to impose restrictions on the type of weapon allowed to be stored at home.

About 500,000 Swiss keep a rifle at home, mainly because the militia system requires men over 20 to be ready for military service.

Soldiers who have been demobilised have the right to keep their rifles for annual summer shooting practices held in nearly every Swiss town and village.

Dire straits

“Up until the late 19th and early 20th century, soldiers were obliged to keep their own equipment and their own weapons at home,” Peter Hug, a historian at Bern University, told swissinfo.

This obligation often caused dire financial straits within a family as the soldiers had to pay for their own equipment. “People in rural areas were often hit especially hard,” said Hug.

According to Hug, during the early 18th century every man who wanted to get married had to have a uniform and a weapon in order to get permission to tie the knot.

“But when protectionism arrived in the 1880s the government earned so much money from customs duty that it could afford to pay for soldiers’ weapons,” he said.

From that time on Swiss soldiers no longer had to pay for their rifles; however, they were obliged to maintain and look after them. Even today soldiers have to replace everything that is lost or broken.

“If someone lost their rifle they would get in trouble with the law,” added Hug.

Ammunition

Even though the government decided to pay for the rifles there was still some confusion over what to do about ammunition.

“In 1891 the federal authorities decided to hand out so-called ‘pocket ammunition’. This enabled the infantry to respond immediately in case of an attack,” said Hug.

The government thought that some soldiers would see action before the army was fully mobilised, which normally took three days.

The country’s shooting clubs, which were heavily subsidised by the defence ministry, also played a key role in ensuring soldiers kept their rifles at home.

Tradition

But this old tradition has come under fire from critics who say that weapons and ammunition could be misused.

Supporters disagree, arguing that individual cases of misuse are an exception and that far more people are killed on the roads than by an army-issue rifle.

But opponents do not share this view. “I am always worried we could have a tragedy where a madman runs amok and shoots 20 people in Zurich,” said Martin Kilias, a Lausanne-based criminologist.

This fear became a reality in September 2001 when a gunman killed 14 politicians in the local parliament in Zug. The 57-year-old was carrying a Swiss army weapon.

Despite the Zug incident, which resulted in tighter security at public buildings in Switzerland, the military refuses to budge on the issue.

However, Hug thinks public pressure could actually make this symbol of national identity disappear in the next ten years.

swissinfo, Urs Maurer

Switzerland Tourism has been holding its annual conference for professionals with the focus on a new marketing concept known as “smart selling”.

But there are tensions between the national tourist office and its members about how to promote Switzerland abroad.

Some 1,150 representatives from the industry - from tourism managers to hoteliers - have been taking part in the conference which opened on Monday in Bern.

The main theme of this year’s event is how to sell Switzerland and its products successfully.

But Switzerland Tourism’s policy of unifying its marketing strategy has come under fire from some quarters, with some arguing that a global campaign would not work because different countries appreciate different aspects of Switzerland.

For example in Italy, according to one observer at the fair, Switzerland is regarded as a relaxed holiday destination, appreciated for its clichĘs of mountains, cheese and chocolate.

Therefore a campaign showing Switzerland as an exciting place to spend a holiday would not work.

But JŘrg Schmid, the head of Switzerland Tourism, which is responsible for marketing the country, denies that the strategy doesn’t work.

“We are not boring at all,” he said. “It has been statistically demonstrated that the range of experiences on offer in Switzerland is higher than in other countries.”

Agreement

But despite tensions over the strategy, delegates said they were satisfied with the professionalism of the organisation’s marketing campaigns.

For the first time in the body’s 90-year history it had launched an international advertising campaign on television focusing on walking holidays in Switzerland.

Other plus points were Switzerland Tourism’s office in Germany and its relations with Swiss Federal Railways and Zurich airport.

But the high prices in Switzerland, which have been shown to deter tourists, came under criticism.

Lack of support

Another bone of contention among delegates is the perceived lack of political support for the tourism industry.

The sector generates over SFr12 million ($9.22 million) and employs 240,000 people.

But statistics show that two-thirds of the income generated by tourists actually goes into other sectors of the economy such as the retail business and banking.

The tourism industry has therefore been calling for extra financial support.

Every five years parliament decides how much credit to give the sector and is due to decide this year. Switzerland Tourism has asked for SFr277 million, but the government only envisages giving SFr200 million.

There is still chance of a compromise, but tourism professionals remain dissatisfied.

Criticism

“As soon as the tourism sector announces negative results, commentators have a go at our industry’s structures and strategy,” said Dick Marty, president of Switzerland Tourism and Radical parliamentarian for Ticino.

“On the other hand stagnation in the chemical sector, the decline of the mechanical industry or the fall in watch exports are all blamed on the framework conditions or the international [economic] situation,” he added.

Switzerland Tourism says that the extra money it is requesting will go towards publicising Switzerland in Asia and Eastern Europe.

Experts say that the new wave of tourists from Asia and Eastern Europe should go some way towards offsetting the fall in visitors from Germany.

swissinfo, Alexander KŘnzle

Switzerland’s troubled national airline, Swiss, has named a German, Christoph Franz, as its new CEO.
Franz, who takes up his position in July, previously worked for the German airline, Lufthansa, and Germany’s national rail service, Deutsche Bahn. Franz was chosen from a final shortlist of six. The selection process was lead by Swiss chairman and acting CEO, Pieter Bouw, a former boss of the Dutch carrier, KLM.
"Swiss chose Christoph Franz because of his track record in various sectors of the transport industry," the airline said in a statement.
"His specific know how in the field of turnaround management was also a deciding factor in his favour."
Among the 43-year-old's credentials are several senior posts at Lufthansa, including as a member of the team that oversaw the airline’s restructuring programme in the 1990s.
At Deutsche Bahn, Franz also held a range of positions, including member of senior management.
Restructuring
Franz's appointment ends more than a month of speculation over who would replace AndrĘ DosĘ. He unexpectedly stepped down in March, after becoming entangled in an investigation into a Crossair plane crash two years ago.
Franz, who will start work at Swiss at the beginning of May, will have his hands full proving he is able to turn the airline’s fortunes around.
But Swiss says that both it and the government are confident Franz is up to the job.
“The government is sure that Christoph Franz will lead the airline through its restructuring programme and secure the company a strong place in the market,” Swiss said in its statement.
Swiss has been wracked with financial woes since it took to the skies in 2002.
Last year, the airline reported an operating loss of SFr498 million ($386 million) - an improvement compared with 2002, when it lost SFr909 million.
Positive reactions
The Swiss business Federation, economiesuisse, said it was certain Franz could lead the airline into the black.
Switzerland’s political parties also welcomed the decision, on the whole, especially the fact that the appointment was made so quickly.
The centre-left Swiss Socialist Party said it was “inconceivable that Swiss remain without a CEO for months on end”.
The newly appointed president of the centre-right Swiss Radical Party, Rolf Schweiger, said that it was “a positive sign that Franz had previously worked in the transport sector.”
However, there was some surprise at the choice, as Franz is relatively unknown in Switzerland.
Up to the job?
Aviation expert, Sepp Moser, was more sceptical, saying the appointment would make no difference to Swiss's fundamental problem of being too big for its market.
Moser also questioned Franz's credentials.
"He has no executive experience. That doesn't mean he has got to be bad," he said. "But that is not the problem, the problem is the structures and financial situation."
swissinfo with agencies