Swiss vote on Europe in balance

THE tranquillity of rural Switzerland has been ruptured by a political debate so fiercely argued that tomorrow's referendum on European trade now turns on perceptions of national identity.

Tomorrow the country will vote on whether Switzerland should accept the terms of an agreement struck last year that would give it access to free trade with the European Community.

The European Economic Area (EEA), as it is called, was conceived as a half-way house for Switzerland, Austria, Finland, Norway, Sweden, Liechtenstein and Iceland; a means of granting them many of the advantages of EC membership without them being committed politically.

Like the Maastricht treaty, it can only take effect after it has been ratified by all partners. Were Switzerland to reject the deal tomorrow, Liechtenstein would probably follow suit, and the process would be slowed for the other five, all of whom should have ratified by the end of this month.

But unlike Maastricht, it would be politically possible, if difficult, to create an EEA of six not seven. Thus, outside observers think that the real losers in the case of a No vote would be the Swiss.

In a country not renowned for excessive shows of emotion, feeling is running high with neither camp showing a clear majority. Part of the problem is that, to win, the government needs not only a majority nationwide, but a majority in at least 12 of the 23 cantons.

This last requirement is the hardest to fulfil. For while the Yes support is fairly evenly spread on a per capita basis, in regional terms it is only the French-speaking minorities who are truly enthusiastic.

The antis - strongest in the highly individualistic German- speaking areas - fear that in joining the EEA, Switzerland would compromise 700 years of proud neutrality, cede sovereignty and independence of action and open its borders to a wave of economic immigrants.

The Yes lobby points out that Switzerland cannot afford to put its head in the sand. It is a part of Europe in so far as the EC is its largest trading partner, accounting for a third of total exports.

EEA membership would, by some estimates, expand the annual economy by about 0.5 per cent and bring incalculable dividends in terms not only of trade, but the integration of transport systems and infrastructure.

The question is not of mere parochial interest. Switzerland's decision is closely bound with the larger question of whether or not to expand the Community by admitting new members.

The Swiss government has already formally applied for EC membership, along with Austria, Sweden, Finland and Norway. The EEA question is thus muddled up with the issue of full membership, although the political class, including the Swiss President, Rene Felber, has been at pains to keep the two apart.

There is growing agreement that the EC will be enlarged sooner rather than later. Countries such as France, who previously argued that the Community's own institutional base must be strengthened before new members were admitted, are, in these times of economic stringency, beginning to see the virtues of a bigger EC.

At the Franco-German summit in Bonn this week, President Francois Mitterrand and Chancellor Helmut Kohl agreed that talks on enlargement should start at the beginning of the year and be concluded by the end of it.

This marks a significant change of attitude; it has always been understood that there must be an acceptable decision on the vexed question of the EC's future financing before enlargement negotiations could begin. But the French are clearly prepared now to be more flexible on this point.

The economic strength of the five applicants would ensure they were self-financing and net contributors to the EC budget.

The EEA agreement already covers about a third of existing Community legislation, facilitating any eventual negotiations. The obvious hitch is that these cannot begin in earnest until Maastricht is ratified, since it is the treaty that will define the future shape of the Community.

A No vote by the Swiss tomorrow would certainly set back any national aspirations of full membership, possibly to the benefit of other applicants. It would also provoke something of a crisis at home. The French-speaking cantons have already warned that if their hopes of closer union with their European neighbours are dashed, they will be pressing for greater autonomy within the Swiss constitution.