JOINT COMMITTEE ON EUROPEAN AFFAIRS debate -
Wednesday, 23 Nov 2005

Visit of Swiss Parliamentary Delegation.

Chairman

The first item on our agenda is an exchange of views on matters of mutual interest with members of a delegation from the Swiss Parliament. They are all very welcome and I thank them for attending the joint committee. I believe I am having dinner with them tonight, to which I am looking forward. I saw them earlier in the Dáil Chamber and hope what they saw was interesting.

The members of the delegation are: Mrs. Thérèse Meyer-Kaelin from the Christian Democratic Party who is President of the National Council; Mr. Hans Fehr from the Swiss People's Party; Dr. Johannes Randegger from the Radical Free Democratic Party; Dr. Felix Walker, a member of the Christian Democratic Party; and Mr. John Clerc, Deputy Secretary General, who is accompanying the delegation.

I understand members of the delegation have also visited Kinsale and Cork city. We try to keep proceedings as informal as possible in this joint committee. Usually, when we receive a delegation we ask its members to make some opening remarks. I will then open the debate to members while trying to keep the exchanges as free flowing as possible. I call on Mrs. Meyer-Kaelin to day a few words.

Mrs. Thérèse Meyer-Kaelin

I thank the Chairman and his colleagues for giving us this opportunity to explain our relations with the European Union which is Switzerland's most important political, cultural and economic partner. Both are founded on such fundamental values as democracy, human rights and the rule of law.

As a small state in the centre of Europe, Switzerland's fortunes are closely interwoven with those of its neighbours. I will cite two examples. First, in 2004 some 80% of our imports, amounting to €73 billion, came from the European Union, while almost 60% of our exports, worth €60 billion, went to the Union. Second, some 800,000 EU citizens live in Switzerland, while 300,000 Swiss nationals live in the European Union. Some 700,000 people cross the borders of Switzerland every day.

Switzerland's relations with the European Union are based on bilateral agreements, the main purpose of which is, generally, to secure market access. There are agreements, however, which have different objectives. They reinforce co-operation in new policy areas such as internal security, legal assistance, asylum, culture and the environment. Since 1972 we have had a free trade agreement essentially covering the free circulation of industrial goods. The so-called bilateral agreement between Switzerland and the European Union covers seven specific areas. These areas comprise free movement of people, the elimination of technical barriers to trade, public procurement markets, civil aviation, ground transport, agriculture and research. The agreements were signed on 21 June 1999, approved by 67% of Swiss voters in an optional referendum on 21 May 2000 and entered force on 1 June 2002. In a referendum on 25 December, 56% of the population voted for the extension of the agreements to the ten new member states.

The agreements enable Swiss companies to operate in the internal EU market subject to practically the same conditions as their EU competitors in the seven sectors concerned. They ensure a reciprocal opening of markets in a progressive and controlled manner. The so-called bilateral agreement two was signed on 26 October 2004 and covers co-operation in the fields of justice, policing, asylum and migration, the Schengen and Dublin agreements, taxation of savings, the fight against fraud, agricultural products, the environment, statistics, media, education, occupational training, youth and pensions. In a referendum on 5 June, the Swiss people accepted the Schengen and Dublin agreements with a 55% majority and these should enter force in 2008. The agreements on agricultural products and pensions are already in force, while the agreement on taxation and savings will enter force on 1 July 2006. The other agreements will enter force at a later stage.

The Swiss Government's long-term objective was accession to the EU. Before the end of 2007, it will present a report that will outline the consequences this step would have on Swiss political institutions in main policy areas and describe the necessary reforms. At present, the focus is on bilateral relations and accession is now one option among others. Questions also arise in terms of associations, agreements and continuing bilateral arrangements. For many people, major obstacles to membership include direct democracy, effects on the rights to hold referenda and initiatives, federalism and potential challenges to cantonal competencies. The Swiss franc, which is a solid currency, would be replaced by the euro. Value added tax would more than double, from the current 7.6% to 15% and our direct income tax will have to be reduced. There may also be problems with regard to the Union's agricultural policy. Finally, there is the question of neutrality, which is important to the Swiss.

Not being a member means that our country will, in some ways, become a satellite because we will have to adopt European legislation, without having a role in its negotiation. A formal referendum on accession has never been held but a popular initiative calling for the immediate commencement of negotiations was rejected in 2002 by 78% of voters. That has become a problem for us. In 1992, the Swiss people rejected, by a small margin, a European economic area agreement between EU and EFTA countries. However, most of the issues involved are now covered by Swiss bilateral agreements. My colleagues will outline their positions, as we are not all of the same thinking.

Chairman

God forbid that would happen.

Ms Meyer-Kaelin

Switzerland is a democracy and I am sure members will also be interested in hearing their views.

Dr. Johannes Randegger

I thank members for this great opportunity to meet them. We visited the Dáil and Seanad earlier.

I wish to speak about Switzerland's relationship with the European Union. Geographically, Switzerland is located in the middle of Europe and culturally, it is a country whose people speak many different languages including, German, French, Italian and Rumantsch, an old Roman language. It is a nation which came together because of its will to do so. It could have split with those considered to be French going to France and those considered Tucino-Italian going to Italy. Switzerland also had the choice of joining Austria or Germany.

Switzerland is located in the centre of Europe and has a very basic democratic structure which affords its people the last say in regard to every law passed by Parliament. It takes only 2% of voter signatures for a law passed by Parliament to be put to public vote in each canton. We are continually challenged by this basic democratic right, which is a key issue for many Swiss citizens in terms of our joining the European Union. Ms Meyer-Kaelin has outlined the economic reasons for this. Swiss people are used to having the last word. For that reason, any move towards our becoming a member of the Union will be slow.

On 6 December 1992, a small majority — as was the case in Norway — of only 50.6% voted against the direct association agreement. However, that was a strategic point in the debate. It is also the reason we are taking the route of bilateral treaties. We have successfully managed to complete the second round of bilateral treaties, in particular the free exchange of people into Switzerland from the 25 European Union member countries. The two crucial dates for the exchange programme are 2011 and 2014. In the public debate on the second bilateral treaty, for which we are seeking a "Yes" vote, we always say we will follow that timeframe. In 2011 we will start to think about a new strategic relationship with the European Union. As a result of our bilateral treaties, we have brought order to our relationship. We have the support of the majority, 56% in the last public vote. We have given our word that we will follow that programme.

I hope members will now be better informed about the Swiss position.

Chairman

Before I open the debate to members, I will ask a question. Madame President mentioned neutrality as being one of the stumbling blocks for accession to the European Union. A debate is ongoing on Irish participation in rapid response units, or battle groups, as some call them, that may be set up in the European Union. It was indicated recently that we were moving towards overcoming the constitutional blocks to allowing Irish troops to become involved in these new groupings. I ask Mrs. Meyer-Kaelin if she sees Swiss participation increasing in the near future in any such organisations? Is this still a very important issue in Switzerland? The delegates may be aware that American troops have had access to landing facilities in Shannon Airport for a number of years. However, if asked, a large majority of Irish people would characterise the country as neutral.

Is the role of the country vis-à-vis Iraq the subject of debate in Switzerland? How do the people view Swiss neutrality?

Mrs. Meyer-Kaelin

We are open to the world. Our country is special, but we are conscious that as Switzerland is situated in the centre of Europe, we must have good relationships. We have strong trading links with other countries. The government is seeking to establish agreements with other countries.

We live in a democracy and the government must consider the will of the people. The Swiss do not want to join the European Union. The government is conducting an evaluation and will set out its findings in a report which will clarify a great many matters for all Members of Parliament and the population in general. While we may take a decision at some point, we are open to suggestions until then. Members may have noted that our government will have discussions with the USA and other countries with a view to opening up free trade and facilitating imports and exports, especially with the former.

Chairman

I do not know to what extent Switzerland has participated in peacekeeping operations.

Dr. Randegger

We have had public votes on the issue. It was decided that Swiss contingents for missions such as the one in Kosovo which contain more than a certain number of soldiers must be approved by parliament in a vote. I am not sure what the exact figure is. Switzerland wishes to play an active peacekeeping role and support international efforts, but there is a slight brake on policy whereby parliament wants to be involved at a certain level. Due to our constitution and policy of neutrality, the Swiss cannot participate in peace enforcement actions. However, Switzerland is extremely happy to engage in supporting roles and infrastructural functions which are also necessary in international efforts.

Mr. Hans Fehr

I belong to the Swiss People's Party which did not want to send soldiers abroad due to Switzerland's strict policy on neutrality. If we go abroad, the credibility of our neutrality will be endangered. However, we lost the vote. While the opposing side said foreign contingents would be used for peacekeeping rather than peace enforcement missions, in reality it is not possible to separate one function from the other. A situation may explode and war or conflict may begin and soldiers may move from peacekeeping directly to peace enforcement. NATO's chief of staff, whose name I cannot remember, said——

Chairman

Some general.

Mr. Fehr

A very good and intelligent general. He said if one takes the first step, one must say "Yes" to all of the consequences which follow. Either one is there or one is not. Switzerland is a neutral country which only has soldiers for its defence and protection. If we send missions overseas, they are always humanitarian through the Red Cross. We believe we must engage in such missions well and with only civilians, not soldiers.

Switzerland is very open to the world and wants good relationships with every country. It can prove that this is the reality. While we want collaboration with the European Union, we do not want integration with it. Mrs. Meyer-Kaelin, President of the Conseil National, has stated Switzerland is a democracy with a directly elected federal structure with a strict policy of neutrality. It is an independent state which is our way of success. For 200 years it was not involved in wars and no foreign soldiers have been in our territory for all that time. Swiss citizens are entitled to vote. It is always our intention to be open to the world but we want to decide for ourselves. That is the reason for Switzerland's success.

Deputy Sexton

I welcome the delegation. ABB, Asea Brown Boveri, Limited, with which my husband works, is located in the Longford-Roscommon constituency and has recently had a successful expansion. Several years ago, in a previous career, I had a connection with a company called Ed. Zinniker. In a way, therefore, I have had an ongoing relationship with Switzerland.

On a point made by Mr. Fehr, does Switzerland feel disadvantaged by not being a member of the European Union? I understand bilateral treaties are in place which work well for the Swiss. The delegation is correct that if Switzerland is going to join the European Union, it must have the support of its people. There are problems within the European Union with cynicism among the people about EU structures. Will Dr. Randegger elaborate on the procedure whereby if 2% of the population raise an issue, it must be decided by all the cantons?

Mrs. Meyer-Kaelin

When dealing with legislation in parliament, even for an amendment of one word, if there are 50,000 signatories against it, the issue must be decided by all voters. The procedure known as the initiative right allows 100,000 people to propose a revision of the federal constitution which the population is entitled to vote to accept. A majority of the cantons and the people must vote "Yes" to include it in the constitution.

Chairman

How often does that happen?

Mrs. Meyer-Kaelin

It happens often.

Deputy Sexton

Who facilitates the initiative? For example, if I collect 1,000 signatures——

Mrs. Meyer-Kaelin

One needs 100,000 signatures to initiate the process.

Mr. John Clerc

One needs 2% of the 4,700,00 voters.

Deputy Sexton

Would I bring those signatures to my canton?

Mr. Clerc

One collects signatures from all over the country.

Mrs. Meyer-Kaelin

One brings the signatures to the parliament which will recommend whether one should proceed. If it does, the people will vote. We have four votes a year, on referenda, laws, initiatives and elections.

Senator Dardis

Must a vote be carried in every canton or can one canton veto the others?

Mr. Clerc

In a vote on a constitutional matter a majority in 12 out of 23 cantons is required. In a vote on a legislative matter only a simple majority of the voting population is required. It is more difficult to revise the constitution than to adopt a law.

Senator Dardis

I join my colleagues in welcoming the delegation from the Swiss Parliament. Together with the Speaker, I welcomed them this morning in the Seanad. We are delighted to meet the visitors because our countries have much in common, being of a similar size and having a similar population. The unemployment rate in Switzerland is significantly lower than that throughout the European Union, which may be one reason people voted against joining the Union.

Chairman

We are not quite equal, if the Senator reads the economic figures in per capita terms.

Senator Dardis

I noticed, however, that we are not as wealthy as the Swiss in per capita terms. I thank the Chairman for that reminder. The Swiss mountains are somewhat higher than ours too.

One of the points of concern to me has been dealt with but I wish to turn to the question of neutrality, on which we have a common interest. We would not go as far as Switzerland in joining the partnership for peace in NATO but that is not to say it compromises Swiss neutrality because it is not the same as being a member of NATO. The President, however, spoke about being on the road to European Union membership and reaching a certain point, from which it is difficult to withdraw. A similar argument could be made with regard to the partnership for peace. We take the view that participation in peacekeeping activity does not compromise our neutrality, as long as it is under a UN mandate. That leads me on to the issue of the Petersberg tasks, humanitarian aid, conflict resolution and so on. Was it necessary to hold a referendum to sanction Switzerland's membership of the partnership for peace?

Dr. Randegger

We held a referendum on membership of the partnership for peace, to which my colleague referred when he said we had lost the referendum. Until that date, the law prevented our soldiers from carrying arms to defend themselves. Now they carry weapons for self-defence. Part of our policy is to help solve problems at source. That is the way I personally justify and explain why they are there — because we want to stabilise critical situations to support freedom and be a part of all peacekeeping missions. That is the justification for it, both for me and my party.

Dr. Felix Walker

In the long term we do not have an alternative to European Union accession. Mr. Fehr asked, "Why not?" Dr. Randegger and our President said we have direct democracy. We are democrats which is not so bad, but we have many problems.

Mrs. Meyer-Kaelin

It happens every day.

Dr. Walker

More so than in parliament; the people have difficulties in deciding in referenda. While that is okay, at times we are not in a position to take decisions, particularly on emotive issues. I am a democrat, but I would like to change our democracy into a normal one. Fundamentally, when parliament cannot decide, the people must do so. However, people are not more competent than parliament.

We have a problem because those who are against European accession say we are federalists. Ireland is federalist too, like every other member state of the European Union. They are, more or less, organised on a federal basis. I am a federalist, but we have many problems with adopting a federal approach to issues such as traffic, social affairs, information, research and health. That is because we have different levels of decision-making, which makes the process very complicated.

I wish to make a third point concerning neutrality. Dr. Randegger made the same point to the joint committee. My daughter was in the Balkans and I think it was good for her to be there because such work is not against neutrality. However, we can be egoists. Since our rotation in 1992, we have been against economic association. Switzerland has its lowest economic growth rate since 1992. Ireland has experienced economic growth through its partnership with the European Union's economy, but we cannot change Switzerland which is in the middle of Europe. We cannot relocate to Sicily. I think, therefore, that it is all right to have bilateral relations. In the long term, however, we will have no alternative but to join the European Union, although not everyone is of the same opinion.

Senator Quinn

I have become familiar with Switzerland over many years. Whenever I visited a Swiss home, I was shown a room in which sufficient food was stored to last days or years.

Deputy Quinn

They must be the Senator's customers.

Senator Quinn

I do not understand how that measure is maintained and enforced. Does it still apply? I was interested to learn that the Swiss Parliament meets for only 12 weeks each year. How are priorities decided? We would love to be efficient enough to complete our work in 12 weeks.

Members of Switzerland's Parliament seem to be badly paid and have limited assistance. As a result, they appear to be required to hold second jobs. Does this give rise to conflicts of interest?

My final point concerns an interesting contrast with Ireland. While we have a powerful central Government but weak local authorities, Switzerland appears to have strong cantons and a weak federal government. Does this cause problems in terms of the overlap of power and how is the balance maintained?

Mrs. Meyer-Kaelin

Members of Parliament are not well paid and must, therefore, also work elsewhere. However the advantage is that they can experience everyday life. In terms of introducing laws, we have direct democracy and, therefore, must reflect the sentiments of the people to be successful. That is difficult for us because we have to work at 130% or more in multiple jobs but it is also to our advantage in that we are with the people.

While Dr. Walker remarked that our form of democracy can be difficult, we are happy when people decide to support us. However, our challenge lies in convincing the voters. Sometimes we are successful but it is a work in progress because we have to listen as well as to convince the people. It is a different way to build a country.

Mr. Fehr said that Switzerland has had a successful history. However, we cannot merely continue in this mindset but must progress by changing the mentality that has given us no growth in recent years. The increasing age of our population will require us to find solutions in terms of pensions and health but it will be difficult to do so without growth. However, people are working towards a solution. Every day is a work in progress.

Mr. Fehr

The issue of the Parlement de Milice was raised. Switzerland is a small country. To be successful, it must take a special route and not do things as others have. The situation may be compared in a political sense to mass production. We must do things our way while remaining open to the world. We believe the Parlement de Milice is the best way forward for Switzerland because those who are forced to work outside politics, in farming, industry, banking and so on, are often closest to the problems on the ground. The danger of not having such a parliament — I do not know if it is the same here — is that one loses contact with one's citizens.

My colleague referred to the dangers of direct democracy or federalism. I agree that the road we are taking is a slow one. However, I will outline an example of the efficiency of direct democracy. Let us consider, for example, the issue of value added tax. Written into the constitution of Switzerland is a value added tax of 7.6%. To change that, even a little, Swiss citizens must vote on it. A direct consequence of that is that value added tax in Switzerland has remained at the same level for many years.

Deputy Quinn

It has remained the same.

Mr. Fehr

Yes, but that has been good for Switzerland. Switzerland's national deficit is now more than 100 million Swiss francs.

Mrs. Meyer-Kaelin

It is more than 100 billion Swiss francs.

Mr. Fehr

That is because Members of Parliament decide how the money will be spent. The difference is enormous.

Mrs. Meyer-Kaelin

We are investing billions in our transport system through the Alps.

Dr. Walker

The question was asked, what is decided at central and at local level? Some 150 years ago, it was decided by each canton that everything would be delegated to national level which is now competent and efficient. The motto, "think global, act local", is a good philosophy. We delegate from national level to the regions because the regions have their own approach, another reason for our 120 billion Swiss franc deficit. My colleague mentioned that our value added tax currently stands at 7.6%. It is true there is an anomaly. The Swiss Parliament is not competent in terms of changing incomes because such laws are written into the constitution. However, it is competent in terms of determining expenditure. The system cannot function in this way. We delegate from national level to the regions because we have had bad experiences with the other side.

Dr. Randegger

I will summarise the position. Deputy Quinn asked about stockpiling food. When I was growing up, my mother had a sufficient supply of oil and fat to last a year or two. I was responsible for the turnover and had to take note of the date of the produce. This, of course, was based on her experience of the Second World War. This is a significant problem in terms of the justification for the Swiss Army. The enemy has disappeared and we are in the process of changing the mentality. We have a small unit in the ministry which is responsible for the preparations for war.

Dr. Walker

We even have ships.

Dr. Randegger

Switzerland still has ocean-going ships because during the Second World War it was supplied by ships that landed at the port of Genoa.

Madame la Presidente, Mrs. Meyer-Kaelin, decides, with the representatives of the various parties, on the priorities for the 12-week parliamentary session. The parliament, not the government, decides on the priorities. The significant difference between the operation of parliament in other countries and in Switzerland is that parliamentarians and not the government make the decisions. Every time a new law is debated in parliament, the game starts afresh because the government does not have a majority and parliamentarians decide on how they will form a majority on each issue. It is always a new game for the government.

As Swiss parliamentarians receive approximately half the remuneration of Irish members, they do not make a living from it. On the issue of a conflict of interests, there is a major difference between the US Congress and the Swiss Parliament. In the US Congress, a conflict of interests is always dealt with by an ethics committee. An engineer, for example, who has worked in the nuclear industry is never allowed to become involved in preparing a Bill on the energy sector. In our country, the opposite applies. In Switzerland, we make use of the expertise of each individual and declare it openly. The professional activity of each individual is described in a book and, of course, such information is now on the Internet. We try to make best use of the competencies of each parliamentarian.

Deputy Quinn

I am a first cousin of Senator Feargal Quinn. The Senator and I do not necessarily share such a close relationship in political terms but I suspect that the experience in Switzerland could be similar. I welcome the delegates and thank them for speaking to us in what is our mother tongue and their second or third language. It is a facility we take for granted and we admire their fluency in the language.

Mrs. Meyer-Kaelin

We have four languages in our country.

Deputy Quinn

I know. I will make a couple of observations before putting a number of very direct questions. The structure of government the delegation described and our structure are in part influenced by the cultural divisions within Europe and its cultural family. Culturally speaking, ours is a Catholic country, as is France, and we have a centralised, top-down system, as has France. France is more secular. I presume Switzerland is a predominantly, though not exclusively, Protestant country which has a bottom-up tradition of decision making. It is important to note I am speaking not of religion, but of culture. There is a difference. The same is true of the whole of Europe. I hope Switzerland joins the EU eventually having democratically so decided, as it has unique early European experiences. It has the European experience of coming to terms with diverse languages and cultures in what is described as a federal system and which we would today describe as an intergovernmental system. Switzerland has resolved problems in these areas which we have yet to do at a European level. The rest of us could learn from this historical experience, especially in France, Ireland and Spain.

As Switzerland was for a long time the place asylum seekers from a wider Europe wanted to go, it has a knowledge, culture and tradition of handling them. Europe is now a venue for asylum seekers coming from the rest of the world. While we can deal with the issue legally and financially, we have yet to learn how to deal with it culturally or politically, as recent events in Britain, France and the Netherlands illustrate. Switzerland has a significant contribution to make in historical terms and to the direction of the European project. I hope it can bring itself to join the European table and make its legacy of valuable historical experience available to the rest of us.

I would love to see the Swiss franc join the eurozone, which would strengthen both those currencies and currencies internationally. I hope it will. I realise that Switzerland cannot join the euro with joining the EU, but if it were to join, it would qualify for the single currency immediately. If the Swiss franc were to join the euro, it would transform the relationship between the dollar and the yen. Among all the other things it could bring to the table, the great contribution Switzerland has to offer the European project is the Swiss franc. While the sharing of the franc may not be attractive to some of the delegates, it would be extremely attractive to us for reasons on which I can elaborate when we meet socially later.

The 25 member states constitute the most significant donor of international aid and development co-operation financial assistance to Third World countries. One of the most significant problems in our current experience of Third World countries, especially in Africa, is endemic corruption. Money which comes from Europe and goes to the Congo gets into the hands of people like Mobutu and goes somewhere else. We need to deal with corruption and to remove the image and reality of banking in Switzerland, whatever about the past, for which none of us is responsible. We need to deal with the reality of our banks. Switzerland is not unique but is special in the perception of the secret Swiss bank account. We need to close off secret Swiss bank accounts used by corrupt political leaders in all parts of the world. Many of them use international aid to steal from both their countries and us, placing it in bank accounts in Switzerland, Liechtenstein, Luxembourg and Ireland.

Deputy Allen

I apologise for my late arrival but I had to attend to other matters. I welcome the delegation. As a former Minister of State with responsibility for sport, I was impressed by the facilities when I visited the Olympic Games headquarters in Lausanne.

Switzerland has a special relationship with the EU, signed in 2004 during Ireland's Presidency of the EU by the Tánaiste when she was Minister for Enterprise, Trade and Employment. In return for greater access to the European Union market, Switzerland contributed €650 million to the social and cohesion fund for new member states. As a non-EU member state, what factors does Switzerland see as an impediment to it joining the EU? As an outsider, looking at Europe's period of reflection after the rejection of the EU constitutional treaty by France and the Netherlands, what do the Swiss see as the major issues facing the EU? I am not asking this because of the result of the football match against Turkey, but what is the Swiss attitude to Turkey's application for accession to the EU?

Deputy Mulcahy

I join in welcoming the delegation. I want to put forward a different view from that of Deputy Quinn.

Deputy Quinn

The Deputy is in the wrong party.

Deputy Mulcahy

What I like about Switzerland is that it is different. I like that it is not an EU member state, that it is neutral and that it has its own currency. It is important for the world that we maintain diversity. It is a decision for Switzerland whether it wishes to join the EU. There are already good economic relations between the two. However, if the Swiss people decide to stay neutral, out of all the power blocs, I will be happy with that decision.

Dr. Walker

When I was younger, I was a banker. Switzerland has a good financial industry. We have stable political and social systems with good economic performance. Our banking industry performs to a high level. We must be better than all the others. Regarding the relationship between the Swiss franc and the euro, I have great respect for the euro because it is a history of success. People have confidence in us and this means that interests are quite deep. When a house is built in Switzerland, 2% in capital interest will be paid on the loan and this is a good rate because the country is independent. If we were in the European Union, we would have no other problems but at present this is not in question.

We formulated a law against money laundering which, together with that of Liechtenstein, is perhaps one of the strongest of its kind. Also important is the responsibility of people to engage in self-regulation. In Switzerland, we have gentlemen's agreements.

Deputy Quinn

There are few gentlemen left in the world.

Dr. Walker

We have agreements, although they may not always be between gentlemen. A client who brings more than a certain amount of Swiss francs to a bank will indicate from where the money came. When such a statement is not forthcoming, the money will not be accepted. This is important in terms of money laundering.

Deputy Quinn

That could also occur in this country. If a person comes into a bank with €250,000 or 250,000 Swiss francs and is asked from where it came, the person may say that he or she won it on the horses the previous week.

Dr. Walker

One cannot take that person's word.

Mr. Clerc

With regard to the dictators, Mobutu is dead. Any of Nigerian dictator Sani Abacha's money deposited in Swiss banks has been sent back to Nigeria. Money deposited by Marcos has been returned to the Philippines. Our legislation enables the countries of these dictators to recuperate money held in Swiss banks. Our 1998 legislation should be noted along with our new practices. Clichés regarding Switzerland as a money-laundering centre should be abandoned.

Mrs. Meyer-Kaelin

I wish to say something from a historical perspective and on foot of my expert experience of multicultural issues. We are a nation that wishes to go forward together with this mentality. It is a pity we were not initially involved in the European process because we could have brought our experience to bear on it. We must convince our population on the issue. We have a special history and it will be a long process. We are nonetheless conscious of the current state of affairs.

Switzerland will give 1 billion Swiss francs to the EU Cohesion Fund. We wish to help weaker countries because this demonstrates goodwill on our behalf. We are not obliged to give the money to the fund but we wish to help weaker European countries.

Mr. Fehr

To conclude, I did not lose the name of the NATO general referred to earlier. The individual in question is General Naumann. He is a well known man and he stated that peacekeeping cannot be separated from peace enforcement.

Chairman

Perhaps I could comment on Deputy Quinn's statement. It may not be true to say that what he was discussing is a cliché. If we wished to delve deeper into the matter, it would take up much more time. I wish to ask some questions on how banking regulations have evolved in Switzerland. Perhaps that discussion is for another day.

Deputy Allen asked a question about the main impediments to Swiss accession to the European Union. As we heard, 78% of the electorate voted against joining the Union in the most recent referendum. Are there other significant stumbling blocks to accession?

Dr. Randegger

We have made clear what the bilateral process entails. The greatest fear of the Swiss citizen in this process is that too many foreigners and too much cheap labour will enter the country, with the result that Swiss craftsmen will lose their jobs. That is the key issue we must address. We have introduced annual exemptions for the ten new EU member states but these must be phased out by the end of 2011. We have also built in a number of safeguards to ensure our social system is not misused by independent entrepreneurs, etc. Our duty is to prove to Swiss citizens that we are on the right track, have established the right measures and the economies of the ten new member states are growing. We need to show them one success after another to reduce their fears. Otherwise, under our current system, we have no chance, as Mrs. Meyer-Kaelin pointed out, because Swiss citizens will ultimately take the decision.

Mrs. Meyer-Kaelin

As I stated, the principal obstacles to Swiss accession to the European Union are our system of direct democracy and federalism. In addition, accession would require Switzerland to significantly increase its current low level of VAT and find a means to ensure the survival of our agriculture sector. We must be intelligent and observe the process. Perhaps remaining outside the European Union will create a major problem for Switzerland in future.

Dr. Randegger

We, Swiss, are very spoiled in that we live in one of the wealthiest countries in the world. This creates a risk adverse attitude in which people ask why they should accept more risk. While we complain about our miserable lives on a daily basis, we live them against a background of considerable wealth. That is one of our problems.

Chairman

On behalf of the joint committee, I thank the delegation for coming before the joint committee and engaging in such an excellent exchange. The delegation's schedule indicates it has had a busy time since arriving in Ireland. I am aware it is due to meet the leader of my political party in about ten minutes, after which it will meet Deputy Liz McManus, deputy leader of the Labour Party, and Senator Rory Kiely, Cathaoirleach of the Seanad. I am sure the delegation will find these meetings stimulating and hope its members enjoy the remainder of their trip.

The joint committee went into private session at 3.15 p.m. and adjourned at 3.35 p.m. sine die.