Cohesion Billion

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Swiss cooperation with Eastern Europe
Transition aid   Enlargement contribution
in billion CHF   in billion CHF
1990-2006   3.45
2007-2011   0.73   2007-2017   1.3

The cohesion billion - officially enlargement contribution (fr. Contribution à l'élargissement , it. Contributo all'allargamento , en. Enlargement contribution ), also cohesion contribution - denotes an amount in Swiss francs (CHF) which Switzerland has to pay according to the Federal Council decision of March 31, 2004 as well as by resolution of the National Council and Council of States of March 24, 2006 is ready to allow the ten new states of the EU (accession on May 1, 2004). It was decided that over ten years of the so-called payment period, an average of 100 million Swiss francs should be paid out annually . Projects and programs can be applied for in the partner country during the first five years of the so-called commitment period.

The circle of the originally ten new member states of the EU has expanded to 13 new EU countries since 2006 (as of 2016). With the "Sixth Enlargement" (eastward enlargement, Part II) 2007, two further states of the former Soviet bloc joined the EU on January 1, 2007, Bulgaria and Romania. Finally, the “seventh enlargement” in 2013 - for the time being probably the last enlargement of the EU - concerned the former Yugoslav republic of Croatia (independent since 1991), which was admitted to the EU on July 1, 2013 as the 28th member state.

The enlargement contribution should not flow into the EU Cohesion Fund ; Switzerland itself decides which projects or programs are to be supported. No additional tax funds should be used, as they must be provided by the departments involved ( EVD and EDA ). The enlargement contribution partially replaces the previous Swiss aid to the east - the transition aid for cooperation with the East - amounting to 1.2 billion Swiss francs, as this "has borne fruit well and can now be ended" in Bulgaria, Romania and Russia.

With the enlargement contribution, Switzerland wants to participate in the "reduction of economic and social inequalities in the enlarged EU". The recipients are the 13 states that joined the European Union on May 1, 2004 - the former communist countries of Central and Southeastern Europe (Poland, Hungary, the Czech Republic, Slovakia, Slovenia, Bulgaria, Romania, Croatia) and the Baltic states (the former Soviet republics of Estonia, Latvia, Lithuania) and - in addition to the aforementioned states of the Eastern Bloc, which fell apart from 1989 (November 9th - fall of the Berlin Wall) to 1991 (December 26th - dissolution of the Soviet Union) - the two island republics of Malta and Cyprus. Despite successful systemic change, the socialist countries of the European East up to the turn of 1989–1991 still lag behind the Western European countries considerably in some respects. The average per capita income in the new Member States is only about half the EU average.

The legal basis for the enlargement contribution is the Federal Act on Cooperation with the East - Federal Act on Cooperation with the States of Eastern Europe of March 24, 2006 - which was approved by the Swiss electorate on November 26, 2006. At that time, Switzerland decided to make one billion Swiss francs available over a payment period of ten years for projects in what were then ten new EU countries (EU-10). Implementation should take place in close cooperation with the partner countries that receive the applications and began in the course of 2008.

In the negotiations at that time with the EU on Switzerland's contribution to cohesion, Switzerland objected to questioning banking secrecy on this occasion. The potential controversial issue of “banking secrecy” has become irrelevant due to the developments that have now taken place on a political level.

The cohesion billion as a means of exerting pressure on Swiss politics

In return for the enlargement contribution decided in 2004 and the associated solidarity support in building up the Eastern European countries of the EU, Switzerland received extensive access to the internal market of the European Union.

As part of the renewed negotiations between Switzerland and the European Union at the end of 2017 about a second payment, the so-called cohesion billion, amounting to CHF 1.3 billion to structurally weaker EU member states, the Swiss banks hoped to link the payment of the Cohesion billion to be able to achieve expanded access to the EU internal market. The Swiss Bankers Association hoped to use the cohesion payment as a means of pressure for better access to the EU internal market and thus in particular to improve business relationships with French and Italian customers.

At the talks between the Swiss Federal Council and EU Commission President Jean-Claude Juncker taking place in Bern on November 23, 2017, Federal President Doris Leuthard promised to continue supporting the development process in Eastern Europe by pledging another billion in cohesion without receiving any corresponding consideration from the EU . This consideration was already granted in 2004 through the extended access to the internal market. At the same time, no progress has been made on the institutional framework agreement .

For its part, the EU is now skillfully combining various dossiers during negotiations in order to strengthen its negotiating position with Switzerland. The decision of the EU Commission to only recognize the Swiss stock exchange regulation as being equivalent to the regulation in the EU for a limited period of one year was massively criticized by the Swiss. Due to the progress made by the EU on the institutional framework agreement, Doris Leuthard is coming under strong domestic political pressure. In a press conference held by Doris Leuthard in December, the Federal President spoke of discrimination against Switzerland and suggested suitable countermeasures as well as a renewed review of the release of the cohesion billion. The Swiss People's Party, SVP, even rejects the payment of a cohesion billion in principle.

The extent to which the Swiss cohesion billion is suitable as a means of pressure to get the EU into concessions is shown by a comparison by EU ambassador Michael Matthiessen on Swiss radio SRF. The Swiss cohesion billion corresponds to 0.4% of the amount that the EU has raised to rescue Greece (CHF 300 billion) and 0.3% of the amount of CHF 410 billion that the EU itself invests in aid to the East.

Distribution key for the enlargement contribution
 
  in % in CHF million
Poland 37.6% 489.02
Romania 13.9% 181.00
Hungary 10.0% 130.74
Czech Republic 8.4% 109.78
Bulgaria 5.8% 76.00
Lithuania 5.4% 70.86
Slovakia 5.1% 66.87
Latvia 4.6% 59.88
Croatia 3.5% 45.00
Estonia 3.1% 39.92
Slovenia 1.7% 21.96
Cyprus 0.5% 5.99
Malta 0.4% 4.99
Total 100.0% 1,302.01

completion

Funding started in 2008, with the SDC / SECO providing for the following procedure (source: "Principles of Cooperation", SDC / SECO, March 2007):

  • The SDC / SECO only accept project and program proposals from the National Coordination Unit (NCU)
  • SDC / SECO approve the financing of projects / programs
  • Swiss contribution to the enlarged EU is not tied
  • Awarding of contracts according to WTO / EU rules by the partner institutions
  • Delegation of payment processing to the partner countries
  • Monitoring / control / evaluation are of central importance

Expected problems

The partial delegation of tasks to partner states (including their NGOs) was and still is controversial, as these are by no means free from corruption .

Private sector involvement

The active participation of the private sector, as well as that of other civil society actors, is to be promoted in order to support the further development of the civil society that is being established.

Thematic fields

(Sources: "Principles of Cooperation", SDC / SECO, March 2007 & 06.100 Message on Switzerland's contribution to reducing economic and social inequalities in the enlarged European Union of December 15, 2006)

Security, stability and support for reforms

  • Expansion of administrative capacities at regional and local level
  • Measures to secure the borders
  • Improve the handling of immigration and asylum matters
  • Access to information systems in the field of security law and improvement of security at the legal level
  • Modernization of the judiciary
  • Develop institutions and capacity to fight corruption and organized crime
  • nuclear safety
  • Natural disaster prevention and management
  • regional development initiatives in peripheral or disadvantaged regions

Environment and infrastructure

  • Renovation and modernization of the basic infrastructure (energy efficiency, drinking water, wastewater, waste disposal, public transport)
  • Improvement of environmental conditions, reduction of pollutant emissions, development and enforcement of standards and norms in the field of environmental monitoring
  • Disposal of toxic waste and rehabilitation of contaminated industrial sites
  • regional, urban and rural spatial planning and land use planning, infrastructure, environment, etc.
  • cross-border environmental initiatives, e.g. B. "Environment for Europe"
  • biological diversity and nature conservation

Promotion of the private sector

  • Development of the private sector and promotion of exports with special attention to small and medium-sized enterprises (SMEs)
  • Facilitating access to finance, supporting SMEs in business management
  • Promotion of certified products from organic farming
  • Promotion of standards, norms and conformity assessment in the field of industrial and agricultural production; Promotion of industrial production that corresponds to the principle of sustainable development from a social and ecological point of view as well as from the point of view of eco-efficiency
  • Improve regulation of the financial sector and develop financial markets and institutions
  • Intellectual Property Protection

Human and Social Development

  • Building capacity in public administration at central, regional and local level with a view to achieving EU standards
  • technical and professional training
  • Research and development (academic exchange programs, grants, partnerships, applied research collaboration, etc.)
  • Health (modernization of hospitals, reform of health insurance systems, preventive measures, etc.)
  • Partnerships between cities and municipalities
  • Support of international development initiatives

Principles and forms of cooperation

Source:

Principles

Foreign policy goals

General foreign policy objectives for Switzerland

With its contribution to reducing economic and social inequalities in the enlarged EU, Switzerland underlines that it is willing to uphold its interest in a secure and stable environment through solidarity. It wants to contribute to security and welfare on the European continent. The specific purpose of Switzerland's contribution to the enlarged EU is to reduce the economic and social disparities between the old and the new EU member states, especially those in which these inequalities are a result of the division of Europe during the Cold War. This applies in particular to the eight Central European and the three newly joined Southeast European acceding countries, which have already largely completed their transformation from planned-economy socialist one-party systems to market-based pluralistic democracies. Regardless of this, the economic, social and ecological indicators are still considerably behind the 15 old EU countries.

The five main foreign policy goals of Switzerland
  • Peaceful coexistence of peoples
  • Respect for human rights and promote democracy
  • Safeguarding the interests of the Swiss economy abroad
  • Relief of need and poverty in the world
  • Preservation of the natural foundations of life.

Further principles of cooperation with the East

Further principles of Swiss cooperation with Eastern Europe are ( BG Ost ):

  • Shared responsibility: Switzerland is actively involved in building a secure, united European continent. Cooperation with Eastern Europe makes a solidarity contribution to securing peace, stability and prosperity in Europe.
    (BG Ost, Art. 3, Paragraph 1)
  • Need-based, participatory project work: Eastern cooperation is based on the needs of the partner countries and their people. The local partners are included in the planning of the projects.
    (BG Ost, Art. 3, Paragraph 2)
  • In addition to its own efforts: the cooperation with the East did not seek isolated solutions. It works in addition to the partner countries' own efforts and is embedded in the reform policies of the governments.
    (BG Ost, Art. 3, Paragraph 3)

to form

Technical cooperation

In the federal administration, the SDC is responsible for technical cooperation ; it seeks participatory solutions to central transition deficits in the following areas:

  • Development of democratic structures and institutions close to the people
  • Income generation and reform of economic structures
  • Sustainable use of natural resources
  • Fight poverty through reform and strengthening of health and education sectors

In doing so, it works with civil society, private or state project partners from planning to implementation, promoting initiative and strengthening local capacities and institutions.

Financial cooperation

In the federal administration, the State Secretariat for Economic Affairs is responsible for financial cooperation , it supports the creation of market-economy structures, promotes the development of the private sector, the expansion and reconstruction of basic infrastructures and makes a contribution to the integration of the transition countries into the global economy. Your main financial instruments and instruments are:

  • Financing grants for infrastructure financing
  • Loan guarantees
  • Payment and budget support
  • Trade and Investment Promotion

financing

According to the decision of the Federal Council of June 16, 2006:

  • 60% of the enlargement aid is compensated by cuts in traditional aid to the East (support for the two Eastern countries Romania and Bulgaria, as well as Russia, who joined the EU in 2007 and benefited from the enlargement contribution, will be discontinued)

and

  • 40% refinanced through reduced expenditure and / or increased income from the federal budget.

The financing of the enlargement contribution is therefore budget-neutral.

For the additional income, the Federal Council plans to include the income from the savings tax agreement with the EU ( Bilaterale II ) - currently around 50 million Swiss francs per year, half of the annual budget of the expansion aid ( if paid over 10 years, or 5 years a quarter).

The cuts in traditional aid to the East are largely made in countries that the federal government, in line with international organizations ( OECD ), does not (no longer) count as developing countries (Bulgaria, Romania, Russia). The total volume of official development aid in Switzerland is 2.2 billion Swiss francs annually (2005), so the reduction will be less than 1%.

referendum

In Switzerland there was a heated argument about this amount. The right insisted that there is nothing in the bilateral agreements about a financial contribution and is afraid of an excessive burden on the federal treasury, also because it fears further demands from the EU. The left was particularly bothered by the fact that the amount is provided at the expense of development aid.

The conservative SVP and the AUNS have launched a referendum against the Eastern Aid Act (Federal Law East, Federal Law East Aid) . The Swiss electorate passed the Osthilfegesetz on November 26, 2006 with a majority of 53.4%.

Extension of the enlargement contribution to new EU member states from 2007

New members Romania and Bulgaria (since 2007; EU-12)

At the beginning of February 2007, the EU Commission asked Switzerland to extend aid to the two new EU countries Romania and Bulgaria (accession on January 1, 2007). According to EU Foreign Commissioner Benita Ferrero-Waldner, it would cost around 300 million Swiss francs over a period of 10 years.

In recent years, Switzerland has supported Bulgaria and Romania with around 25 million francs a year. This transition aid expired when they joined the EU in early 2007, but will be continued in other countries.

New member Croatia (since 2013; EU-13)

With Croatia's entry as the 28th member of the Union on July 1, 2013, the group of countries in the east and south benefiting from the enlargement contribution expanded again, but probably for the last time in the foreseeable future. On June 30, 2015, Switzerland and Croatia signed the bilateral framework agreement. The agreement regulates the implementation of the Swiss enlargement contribution to Croatia. The entire funds (45 million CHF) will be definitely committed to the selected projects by May 31, 2017. The projects must be completed by mid-December 2024.

Projects financed by the enlargement contribution (examples)

Some of the projects financed by the enlargement contribution are listed below, sorted according to the beneficiary countries.

Poland

  • Know-how from the Alps for the Carpathian Mountains (Województwo podkarpackie)

Support of local initiatives in the fields of rural tourism, marketing of traditional products and engagement of local civil society

Topic: “Promotion of economic growth, improvement of working conditions; regional development "

Period 2011–2017

Budget CHF 4,818,388

Romania

  • Assess your own skills and get to know the Romanian world of work

Program "Job Orientation Training in Businesses and Schools (JOBS)"

Topic: “Promotion of economic growth, improvement of working conditions; regional development "

Period 2012–2017

Budget CHF 2,116,280

Hungary

  • Drinking water supply in Borsod-Abaúj-Zemplén county

Rehabilitation of the drinking water distribution network in 11 municipalities in the north-east Hungarian administrative district of Borsod-Abaúj-Zemplén

Topic: “Environmental Protection; Drinking water supply "

Period 2010–2016

Budget CHF 7,803,000

Czech Republic

  • Improved social and economic reintegration of offenders

Project for the modernization of the justice system and the social and economic reintegration of criminals

Topic: “Increasing public safety; Modernization of the judiciary "

Period 2011–2016 (project completed)

Budget CHF 1,438,266

Bulgaria

  • Home Care Services

"Spitex" project - external help and care in four municipalities in Vratsa Oblast

Topic: “Increasing social security; Social services for specific target groups "

Period 2011–2017

Budget CHF 2,418,187

Lithuania

  • Mother and child health

Promotion of further training of health workers and modernization of obsolete hospital infrastructure in 27 Lithuanian hospitals

Topic: “Increasing social security; Modernization of hospitals "

Period 2011–2017

Budget CHF 26,600,000

Slovakia

  • Better living conditions for Roma in Slovakia (Košice / Prešov region)

Social services and educational opportunities, job skills improvement and job search support

Topic: “Increasing social security; Social services for specific target groups "

Period 2012–2017

Budget CHF 1,410,000

Latvia

  • Easier access to education for 9,000 Latvian schoolchildren

Delivery of a total of 110 school buses to Latvia; Development of a school transport system in rural, disadvantaged areas

Topic: “Increasing social security; various social services "

Period 2009–2011 (project completed)

Budget CHF 13,769,767

Croatia

  • Drinking water supply and waste water disposal Ravna Gora, Gorski kotar (Primorsko-goranska županija)

Rehabilitation of the existing, damaged drinking water supply and creation of a sewage network including a sewage treatment plant

Topic: “Environmental Protection; Wastewater treatment "

Period 2017-2020

Budget CHF 3'885'714

Estonia

  • Technological optimization of the operations centers and rescue services (ambulance system)

Financing of two coordinated projects for the technological optimization of the operations centers and rescue services in Estonia

Topic: “Increasing social security; various social services "

Period 2009–2014 (project completed)

Budget CHF 1,280,000

Slovenia

  • Promotion of renewable energies in Primorska Slovenija

Photovoltaics: longest solar noise protection wall in Slovenia (648 m); Installation of biomass heating systems for 29 public buildings

Topic: “Environmental Protection; Energy efficiency and renewable energy "

Period 2009–2015 (project completed)

Budget CHF 3,680,000

Cyprus

  • Sewage treatment plant for domestic and industrial sewage in Vati

Financing the planning, construction and equipment as well as securing one year of operation of a wastewater treatment plant in Vati north of Limassol; Measure to protect the Polemidia reservoir as a drinking water reservoir

Topic: “Environmental Protection; Wastewater treatment "

Period 2012–2017

Budget CHF 3,935,150

Malta

  • Improving cancer diagnostics

Installation of a modern tomograph in the public hospital in Malta

Topic: “Increasing social security; Modernization of hospitals "

Period 2010–2013 (project completed)

Budget CHF 2,794,000

Sources, references

  • Integration Office, FDFA / FDEA : The Swiss Enlargement Contribution
  • IB / DEZA / SECO: Presentation of Switzerland's contribution to the enlarged EU , March 20, 2007
  • IB / DEZA / SECO: Information sheet on the Federal Law on Cooperation with Eastern Europe - transition aid and enlargement contribution , December 2005, February / May 2006
  1. ^ Leuthard-PK: "A clear discrimination against Switzerland" . In: Der Bund, Der Bund . December 21, 2017, ISSN  0774-6156 ( derbund.ch [accessed December 28, 2017]).
  2. ↑ After the EU turned around, doubts about the cohesion billion grow . In: az Aargauer Zeitung . December 19, 2017 ( aargauerzeitung.ch [accessed December 28, 2017]).
  3. ↑ Balz Rigendinger, swissinfo.ch: The EU is showing its new face . In: SWI swissinfo.ch . ( swissinfo.ch [accessed December 28, 2017]).
  4. ↑ Institutional framework agreement: The pressure comes from the very top . In: az Aargauer Zeitung . December 21, 2017 ( aargauerzeitung.ch [accessed December 28, 2017]).
  5. ↑ Blick: Criticism of the federal government: bourgeois are annoyed with the east billion . ( blick.ch [accessed December 28, 2017]).
  6. ↑ www.20minuten.ch, 20 minutes, 20 minutes, www.20min.ch: Leuthard promises the EU 1.3 billion francs . In: 20 minutes . ( 20min.ch [accessed December 28, 2017]).
  7. ↑ Federal Council keeps a low profile on the new cohesion billion . In: az Aargauer Zeitung . November 15, 2017 ( aargauerzeitung.ch [accessed December 28, 2017]).
  8. ↑ Relations between Switzerland and the EU and Vimentis. Retrieved December 28, 2017 (German).
  9. ↑ European Union: Swiss banks demand unhindered access to the internal market . In: Spiegel Online . September 14, 2017 ( spiegel.de [accessed December 28, 2017]).
  10. ↑ SDC ( Memento of June 7, 2007 in the Internet Archive )
  11. ↑ Brief portrait of the enlargement contribution. In: FDFA / DEZA / EAER / SECO. October 31, 2016, accessed November 28, 2016 .

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