PwC report on Swiss financial center Euro CHF exchange rates falls25 March 2019
The recent report provided by PricewaterhouseCoopers and obtained by the Swiss public radio RTS has conclusions stating that the Swiss financial center must try to become more sustainable and transparent if it wants to ensure smooth access to the European market.
Strict environmental rules
The report included conclusions coming from the assessment of the consulting company and World Wildlife Fund WWF. Its aim was to analyze how the introduction of the European Union’s action plan of financing sustainable growth may affect Switzerland. The action plan will be presented next autumn in the European Parliament and will require the sustainable financial products sold in the EU to meet some strict environmental standards in order to get green labels from the EU. Switzerland is not part of the EU, so it does not have to apply to these rules. However, the country has close relations with the EU with many bilateral agreements.
Why this matter to Switzerland?
Even though Switzerland would not need to meet harsh environmental rules as put on sustainable financial products sold in the EU, in order to have access to the huge European market, it will have to adjust. Lack of obeying to the environmental rules, would mean Switzerland won’t be able to sell its financial products on the European market. The development of the EU action plan poses a risk for Swiss financial, fintech center and potentially could cost the country loses counted in million of CHF. That is why PwC warns that the financial center must become more transparent and sustainable in order to have access to the European market as it does nowadays.
So far not much has been done to prepare the Swiss financial center for new EU action plan for sustainable finances. Green parliamentarian Adele Thorens claims that there is lack of strong measures, and that the first step should be better information for investors in both CHF or EUR denominated financial products. She also stated that adapting to the EU standards would be a good thing for Swiss financial center as it will become more competitive on the local and global market. However, there are voices coming from center and right politicians that claim the financial center will regulate itself and that profitability counts more than sustainability.
Framework agreement still in works
In the meantime, Switzerland and the EU are still negotiating on a framework agreement that would ensure smooth cooperation and replace numerous bilateral accords now in force. Getting broader access to the markets of the EU by Switzerland is condition upon accepting the framework agreement, but Swiss government still consults the agreement proposed by the EU in December. A straightforward position has not been yet adopted by Switzerland, as politicians from both right and left part of scene have questions some of negotiated terms. The framework agreement covers areas like air and ground transport, agricultural products, free movement of people or mutual recognition of standards. It has been discussed for the past five years.
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