Swiss stocks will be barred from trading in the European Union from Monday after talks on a political agreement between the two sides ended in deadlock.
The government said Thursday it will block trading of Swiss shares in the EU, an unprecedented step, shortly after the European Commission announced that it saw no reason to extend recognition of Switzerland’s stock exchange beyond the end of this month. The Swiss move is intended to prevent a sudden loss of liquidity.
Bern and Brussels are at odds over a pact that’s been in the works for years and is meant to replace a patchwork of treaties governing areas as diverse as agriculture, immigration and civil aviation. The proposed accord ran into a wall of opposition from both the left and the right in Switzerland, and the EU piled on pressure in 2017 by tying progress on the deal to regulatory recognition of Swiss stock exchanges.
Switzerland’s willingness to gamble on the smooth functioning of its stock market, Europe’s fourth largest, comes as the nation prepares for parliamentary elections in October. Its government says the framework EU deal raises issues such as wage protection and state subsidies that need ironing out before ratification.
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