According to Charlotte de Montpellier, Economist at ING, a 'yes' vote in Sunday's referendum could further complicate negotiations between Switzerland and the EU.
Key Quotes
“We believe this outcome could completely block the negotiations, which are already suffering from strong domestic opposition. In turn, this could impact the granting of equivalence and endanger the entire Swiss stock market.”
“For now, polls indicate that a 'no' vote will prevail. But even so, the whole initiative could make Swiss politicians nervous, especially if there is some popular support for it. They might want to wait for Brexit to be resolved before starting discussions again.”
“Still, time is running out because the renewal of the European Parliament in May 2019 could further complicate the negotiations. And Switzerland will have elections in October 2019 which could frustrate negotiations even more as the Eurosceptic Swiss party (SVP) intends to make the fight against the framework agreement its electoral battle horse to gain even more seats in parliament.”
“Although we think that the EU will probably give Switzerland temporary stock exchange equivalence for 2019, this Sunday's vote could be the trigger for a total halt to the negotiations in 2019. If talks end and equivalence is not granted, the economic and financial consequences for Switzerland could be significant, putting pressure on the Swiss franc.”
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