Switzerland is located in the heart of Europe and is almost entirely surrounded by member states of the European Union (EU). In view of its geographic and cultural proximity, but also due to its political and economic importance, the EU with its 27 member states is by far Switzerland's most important partner. And vice versa, Switzerland is a first-class partner for the EU, and in terms of imports and exports is placed fourth after the USA, China and Russia. Switzerland earns one franc out of three in its exchanges with the EU. Around 60 percent of Swiss exports go to the EU, and 80 percent of its imports come from there. An active European policy is therefore essential.

Switzerland is not a member state of the European Union; instead it conducts its relations with the EU on the basis of bilateral agreements. Specific questions and issues are regulated with the EU via a series of treaties in clearly defined areas. Swiss-EU relations have developed and deepened over the decades. Since the Free Trade Agreement of 1972, an ever denser network of agreements has been developed in several steps. After the rejection by Swiss voters of Swiss accession to the European Economic Area (EEA) in 1992, Switzerland and the EU concluded, among other things, seven agreements in 1999 (Bilateral Agreements I). These were followed by the Bilateral Agreements II (nine agreements and one exchange of letters) in 2004. These agreements provide both parties with extensive market access and form the basis for close cooperation in such key policy areas as research, security, asylum, the environment and cultural affairs. This bilateral approach allows Switzerland to conduct a policy of openness and close collaboration with all its European neighbours. It has been submitted to the Swiss electorate and endorsed at regular intervals.

Switzerland's European policy acknowledges the country's responsibility towards Europe as a whole. Switzerland is actively involved in the Council of Europe and participates within a multilateral framework in peace promotion in South Eastern Europe and in the reform processes in the former communist states of Eastern Europe.

In 2010, the Federal Council carefully evaluated the various European policy options and concluded that bilateral agreements are currently the most suitable instrument for securing an acceptable balance of interests for Switzerland and the EU. In its report dated 17 September 2010 on its evaluation of Switzerland's European policy, the Federal Council stated that its goal was to consolidate, secure and develop this approach, On 26 January 2011 the Federal Council resolved to adopt a comprehensive and coordinated approach to the continuation and development of the bilateral path, and subsequently agreed with the EU to intensify and clearly define this approach.
As part of the implementation of this approach, the Federal Council decided the next steps for the continuation of bilateral negotiations on 1 February 2012.

On 15 June 2012 the Federal Council approved proposals on institutional issues to be submitted to the EU. These principles concern the homogeneity of the application and interpretation of pro-visions in the bilateral agreements, on legal developments, the monitoring of the implementation of the bilateral agreements and procedures for settling disputes. The aim is to find solutions in the institutional sphere during the negotiations on the electricity agreement.

If these solutions prove acceptable to both sides, they could serve as a model for future negotiation dossiers.

Key data

• 1972: Free Trade Agreement EFTA-EU
• 1989:  Insurance Agreement
• 1990:  Agreement on Customs Facilitation and Security
• 1992:  Rejection of the EEA Agreement by the Swiss electorate
• 1999:  Bilaterals I (Free Movement of Persons, Technical Barriers to Trade, Public, Procurement, Agriculture, Overland Transport, Civil Aviation, Research
• 2004:  Bilaterals II (Schengen, Dublin, Taxation of Savings, Fight Against Fraud, Processed Agricultural Products, Environment, Statistics, MEDIA, Pensions)
• 2005:  Extension of the Free Movement of Persons to the 10 New Member States
• 2009:  Continuation of the Free Movement of Persons and Extension to Romania and Bulgaria
• 2009:  Signature and provisional implementation of the revised Agreement on Customs Facilitation   and Security
• 2010: Signature of the Agreement on Education, Vocational Training and Youth

_{June 2012}