Swiss lawmakers advance EU deal as referendum questions take shape

After roughly 24 hours of debate, the Council of States has moved Switzerland’s EU package into the next phase. The upper house broadly approved the new bilateral agreements, while adding conditions on the referendum, immigration and oversight of state aid.

The package, known as Bilaterals III, aims to stabilise Switzerland’s access to the European single market. It would also create clearer arrangements for updating agreements as EU rules change, resolving disputes and monitoring state support. Those issues have weighed on relations since Switzerland abandoned negotiations on an institutional framework agreement in 2021.

The vote matters because the package now has a defined parliamentary route, although no final decision has been made. The National Council, Parliament’s larger chamber, will examine the legislation during the winter session. The electricity agreement, one of the most important elements of the package, was not included in the latest debate. The Council of States is due to begin its examination in December.

Switzerland’s bilateral model has governed ties with Brussels since voters rejected membership of the European Economic Area in 1992. The new package keeps that model in place while setting out new rules for its operation. The eventual referendum will determine whether the agreements survive the parliamentary process and reach implementation.

The upper house wants voters and the cantons to approve the deal. Senators backed a mandatory referendum through both a legislative provision and a separate constitutional amendment. That route would require a double majority: more than half of participating voters nationwide and a majority of cantonal votes.

The Federal Council had supported an optional referendum, which would require only a nationwide majority. The difference could shape the campaign and the final result. A constitutional vote gives smaller cantons a formal role in deciding whether the agreement takes effect, reflecting Switzerland’s long established federal structure.

The referendum timetable remains unsettled. The package must first pass the National Council, and Parliament has yet to complete work on the electricity agreement. Only after the legislative process, and any further procedural steps, will the authorities be able to set out the vote’s timing and precise legal form.

The Local reported that important questions remain open, including when the public vote will take place. The Council of States’ decision has nevertheless clarified the political stakes. Swiss voters are likely to decide on the package under a system that gives both the national electorate and the cantons a veto over the outcome.

The Council of States approved CHF 3.3 billion in commitment credits for Switzerland’s future European cohesion contribution. If the package enters into force, payments would be made between 2030 and 2036.

The largest share, CHF 2 billion, would support projects designed to reduce economic and social disparities. A further CHF 273.4 million would fund migration related projects. Roughly CHF 1 billion would be provided through an additional one off commitment.

Those figures will give opponents a clear target during the parliamentary debate and any referendum campaign. Supporters can point to the contribution as part of the cost of maintaining a stable relationship with Switzerland’s most important external economic partner. The source material does not specify the individual projects or their distribution among recipient countries and programmes.

The upper house also backed legislation to establish a Swiss body responsible for monitoring state aid and other government support. The body would seek to prevent subsidies from distorting competition in sectors covered by the bilateral agreements. Land transport and electricity are among the areas affected. Parliament must still settle the details, and the electricity agreement remains outside the Council of States’ completed work. The financial package therefore sits alongside unresolved institutional and sectoral questions.

Immigration produced the sharpest changes to the Federal Council’s position. The Council of States supported an immigration levy that could be imposed under the negotiated safeguard clause if EU immigration caused “serious economic or social problems.” The Federal Council would assess whether specified thresholds had been reached before invoking the mechanism.

Senators also voted to require EU nationals arriving in Switzerland to provide criminal record information as part of the admission process. The chamber backed restrictions on a new permanent residence status linked to the partial adoption of the EU Citizens’ Rights Directive. EU nationals who are unemployed or receiving social assistance would be barred from applying, and their five year qualifying period would restart.

The Federal Council argued that a blanket exclusion of people receiving welfare could breach the free movement agreement. That disagreement will return in the National Council and could become a central issue in the referendum campaign.

On wages, the upper house largely retained the compromise negotiated with Brussels and supported by the government and social partners. The general security deposit required from foreign firms posting workers in Switzerland would disappear. Authorities could still demand a deposit from a company that had already failed to meet its obligations. An accompanying measure would strengthen protection against dismissal.

The next decisive stop is the National Council, with the electricity agreement still waiting in the wings. The larger chamber is expected to debate the package during the winter session. Its members can accept, reject or amend the Council of States’ decisions before both chambers seek a final version.

The electricity agreement will receive separate attention in December from the Council of States. Its inclusion matters for Switzerland’s energy market, cross border trading and the broader effort to make the bilateral system function more predictably. The agreement was not part of the upper house’s latest examination, so the parliamentary package remains incomplete.

Once Parliament finishes, the referendum question will become more concrete. If the Council of States’ position survives, voters would face a mandatory referendum with a double majority requirement. The exact voting date remains unknown, as does the final text that would go before the electorate.

The coming months will test the coalition behind Bilaterals III. The Federal Council, business groups and social partners must defend the market access and wage protection provisions. Critics are likely to focus on financial contributions, immigration controls and the constitutional implications of closer legal coordination with Brussels. Switzerland’s voters will eventually judge the full settlement, including the concessions Parliament makes before the ballot.