Anyone familiar with Swiss politics may find the current debate strikingly familiar. The slowly unfolding discussion over the Federal Council’s proposed treaty package — which is unlikely to face a vote before 2027 — is largely retracing the same battle lines that defined the run-up to the 1992 referendum on Switzerland’s accession to the European Economic Area (EEA). In some cases, even the key players remain the same.

Those advocating stable and well-regulated relations with Switzerland’s key trading partner are expected to include the Federal Council, business associations and the financial sector, as well as trade unions and, with one significant exception, nearly all political parties.

FDP Unlikely to Break Ranks

The FDP, whose delegates will make a fundamental decision on the new treaty package this Saturday at Bern's Wankdorf Stadium, is also unlikely to break ranks. However, internal opposition within the party should not be underestimated, and recently, somewhat surprisingly, even former Federal Councillor Johann Schneider-Ammann, - hardly the embodiment of a habitual dissenter - argued emphatically  for rejecting the package in the NZZ.

On the other side are the forces that shun the sacrifice of sovereignty and democracy associated with the treaties like the devil shuns holy water. They are rallying, faute de mieux, around the SVP, for which skepticism toward international integration and institutions is a core part of its identity.

Similarities and Differences to 1992

Much like in 1992, opinions still differ widely about the actual economic benefits or losses of sovereignty and democracy that the treaties would entail in practice.

However, besides parallels, there are also differences:

• The business community is much less united this time. In 1992, apart from Christoph Blocher and his closest allies, entrepreneurs who openly declared their opposition to joining the EEA were a rare species. Today, however, the list of members of «Kompass Europa», who reject the new treaties because of the dynamic adoption of EU law and the strong role of the European Court of Justice, is quite long. A striking number of prominent representatives from the financial industry appear on it - in sharp contrast to 1992, when refusing to go along with the mainstream in the banking world was enough to incur a form of excommunication. This also affected Blocher at the time, who lost his seat on the UBS board of directors (though only after the vote).
• The potential downsides of immigration are discussed today in a much broader and more nuanced manner — including among economists and business leaders. Until well into the 2010s, even a mildly critical stance on freedom of movement was seen as suspicious, including in financial and business journalism.
• The enthusiasm and inner fire that once motivated many EEA supporters has largely vanished. Entrepreneurs have since experienced firsthand that the EU is more of a bureaucratic behemoth that a liberal reform project. When they support it today, it is not out of enthusiasm, but because they hope it will bring a degree of planning security, which can be valuable in a tense global environment.
• The division within the Federal Council is likely even deeper than it was back then. As a reminder: even within the SVP, there were ardent EEA supporters in 1992, such as Federal Councillor Adolf Ogi, who described the EEA as a training camp for EU membership. Today, the government supports the treaty package in a sober, almost reluctant manner. However, recently released records show that the cabinet at the time was internally quite critical of the EEA but  considered joining to be an economic necessity. In a recent interview with the NZZ longtime FDP figure Jean-Pierre Bonny — an opponent of the EEA — recalled how deceptive appearances can be. He said that former Federal Councillor Flavio Cotti, known publicly as a firm advocate of integration, had privately encouraged him by phone to intensify his opposition.
• The Green Party will likely be on the side of the supporters this time, unlike in 1992, when its No campaign probably ensured that accession failed not only to gain the majority of cantons but also the popular vote. For the new referendum, according to the Federal Council, only the popular vote will count - an irritating issue in itself. On paper, this is an advantage for the Federal Council and its allies. However, party affiliations have loosened further over the past thirty years. The recent vote on the E-ID showed that, alongside the SVP's core electorate, there is also a strong group of voters who occasionally express their skepticism toward the state and likely toward international commitments as well.
• The composition of the Swiss population has changed significantly due to social change and massive immigration. Family and kinship ties abroad have grown stronger. This could lead many people, for practical reasons, to place great value on the smoothest possible relations with the EU - and to be willing to accept concessions on sovereignty and (direct) democratic rights, perhaps also because these specifically Swiss values are not particularly important to them.
• The United States has partly turned away from multilateralism, and Donald Trump is not exactly seen as a sympathetic figure in Switzerland. For this reason, some citizens might view closer alignment with the EU as the lesser evil. However, the EU itself has changed considerably since then. In 1992, shortly after the fall of the Berlin Wall, it radiated strength and confidence - and adopted the Maastricht Treaty, creating the monetary union. Today, it has more member states but has lost the heavyweight United Kingdom and is now widely regarded more as a community of convenience than as an idealistic project.

While not exhaustive, this list points to one conclusion: forecasting the outcome of the upcoming referendum, whether or not it secures a cantonal majority, will be challenging. Whatever the result, Switzerland’s relationship with the EU will remain intricate and prone to renewed tensions — particularly over immigration.

A few weeks ago, Alexandre Fasel, State Secretary at the Federal Department of Foreign Affairs, explained at an event hosted by the Europa Institute of the University of Zurich how the Federal Council entered negotiations with a new approach after abandoning the framework agreement in 2021. Regardless of what one thinks of the treaty package now on the table, the framework agreement has proved far less indispensable than many advocates of integration once claimed.

Another Reset and a New Main Instrument 

It may already be time to consider another reset, meaning a fundamentally new approach to negotiations. The starting point could be the realization that the EU and its member states will likely continue to face increasing financial needs for various reasons, while their debt sustainability reaches its limits.

Even today, Switzerland makes transfer payments in the form of economically hardly justifiable «cohesion contributions», which the EU expects to continue receiving in the future and which are regarded in Switzerland as the price for (partial) access to the single market. There are, therefore, good reasons to rely on financial contributions in the future as a transparent and pragmatic tool for maintaining a broadly consensual relationship with the EU.

The Better Alternative: Swiss Money for the EU

Such an approach would require negotiating clear parameters with the EU regarding financial contributions, enabling Switzerland to regulate immigration independently, maintain stability in its relations, and preserve market access where it is most advantageous. Though undoubtedly demanding, this task may be preferable to the alternative: a 2,000-page treaty entailing the continuous adoption of EU laws, the gradual erosion of sovereignty and democratic rights, and submission to foreign courts.

The diplomats in Bern could, incidentally, take a cue from the good — and not-so-good — experiences that Swiss banks have accumulated abroad over the past decades with similar «indulgence deals.»

Chances are, if Swiss money is on the table, the EU will suddenly discover a very «pragmatic» way to apply its principles. Considering the development of public finances, the momentum for such a solution is likely to be on Switzerland's side.