SWITZERLAND/EU - New Financial Restrictions Imposed

Arno Froese

The European Union and Switzerland have imposed new restrictions that affect each other’s financial firms.

What are the new restrictions?

Investment firms in the EU are no longer allowed to trade on the Swiss stock exchange. The arrangement, known as “equivalence,” which previously allowed them to do that lapsed at the end of June and the European Commission has decided not to renew it, for now at least.

In response to the EU’s move, Switzerland has banned the trading of Swiss shares on EU markets.

Switzerland’s economic relations with the EU are governed by about 120 separate bilateral agreements. These give Swiss businesses access to most of the EU’s single market.

What exactly is equivalence?

In some areas of financial regulation the European Commission can decide that other countries have equivalent standards to the EU.

In relation to stock markets, the requirements include a high level of investor protection and preventing insider trading.

The significance of an equivalence decision is that the EU investment firms can then trade on the exchanges of the country concerned.

Similar decisions were made at the end of 2017 for the United States, Australia and Hong Kong, along with Switzerland. The Switzerland decision had a time limit of a year. It was then extended for six months but has now expired.

Does this have any implications for Brexit?

It might.

Finance is a very important sector of the British economy and access to customers in the EU is valuable. It is also useful for EU investment firms to be able to trade on the London Stock Exchange.

Many firms hope that equivalence will enable them to continue to deal with the EU after the UK is no longer a member.

What the Switzerland row shows is that the EU, and the Commission in particular, are prepared to use equivalence in a negotiation. If they feel it can be useful in applying pressure to the negotiating partner, they are apparently willing to use it.

And of course Britain is likely to be on the other side of the table at some stage in the not too distant future, with some important businesses that could be hurt by an adverse decision on equivalence.

-www.bbc.com, 2 July 2019

Arno's commentary

Switzerland prides itself on being the richest and freest country in the world. They are fiercely independent, so that even during the Second World War, Hitler would not touch Switzerland. They are the only country permitted by the UN to present their flag in a square format; all others must show their flag as a rectangle. The per capita GDP is listed as $62,100. As with all super-rich countries, their trade balance is positive: imports at $264 billion and exports $313 billion. Life expectancy stands at 82.7 years. One of the most unique aspects of Switzerland is the consumption of the national product. The lowest 10% of income earners consume 7.5% of the national product, while the richest 10% consume about 19%. By comparison, in the US the lowest 10% consumes only 2% of the national product, with the highest 10% consuming 30%.

Thus, we can call the average Swiss citizen super-rich.

This landlocked country with a population of little over 8 million, after many years of excellent relations with the EU, is now in a financial conflict with them. But, as with virtually all conflicts and disagreements in the successful European world, an answer is forthcoming, based on compromises on each side.

However, Switzerland—just like all the countries in the world except Israel—is not special; they are all ruled by the god of this world, whose spirit is penetrating planet earth to such an extent that war is no longer an option. Finance and merchandising are the dominant factor. So, in the end, this unique country will have to follow the dictates of the invisible world: the spirit of Antichrist.

Arno Froese is the executive director of Midnight Call Ministries and editor-in-chief of the acclaimed prophetic magazines Midnight Call and News From Israel. He has authored a number of well-received books, and has sponsored many prophecy conferences in the U.S., Canada, and Israel. His extensive travels have contributed to his keen insight into Bible prophecy, as he sees it from an international perspective.

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