Swiss reject closer link within Europe

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THE SWISS defied their government yesterday and rejected closer union with Europe by voting resoundingly against a deal creating the world's largest free- trade zone.

In a referendum on whether to join the European Economic Area (EEA), a majority of the 23 cantons rejected the arrangement agreed in principle last year after months of negotiations.

By late last night it appeared that the popular vote would deliver the same verdict; according to the rules, that would make the 'no' result definitive. Early analysis of the returns suggests people were concerned that the EEA would open Switzerland to mass immigration or harm the country's financial prosperity.

Francophones generally voted for membership, while German- speakers, 70 per cent of the 6.8 million population, were against.

Frans Andriessen, the EC's External Relations Commissioner, who conducted negotiations on the EEA with the seven-nation European Free Trade Association (Efta) bloc, commented: 'I have to say that the Swiss people have opted for isolation.'

The EEA, devised as a halfway house to full EC membership, would grant Switzerland, Liechtenstein, Iceland, Norway, Sweden, Finland and Austria the trade benefits of a single market without tying them to closer political or financial union.

The Swiss 'no' will mean some renegotiation, but it should be possible to rework the deal for the remaining six.

Analysts predicted falls in the Swiss franc and shares today. The Swiss National Bank said it would intervene in the foreign exchange markets to smooth any sharp movements, Reuter reports.

Leading article, page 16

William Rees-Mogg, page 17