The Swiss government said it will retaliate against the EU’s move to disrupt access to European capital markets.

The disruption of EU access to capital markets means that a number of EU companies cannot be listed on Swiss stock exchanges. Retaliation means that a number of Swiss companies will no longer be listed in EU stock exchanges.

“In the event of stock market equivalence not being extended, the finance ministry will activate this protective measure. [….] Consequently, trading venues in the EU would lose recognition,” the Swiss finance ministry said, adding that “trading venues in the EU would thus be prohibited from offering or facilitating trading in certain shares of Swiss companies from that date.”

The capital markets row is a continuation of the failure between Switzerland and Brussels to reach an agreement over the conclusion of a partnership treaty. The EU is eager to see the consolidation of 120 bilateral treaties into a single framework agreement. Without a partnership treaty, which guarantees the rights of EU workers in Switzerland, the EU is unwilling to extend the existing regulatory equivalence regime.

The Swiss are reluctant to sign a treaty with the EU as it seeks “clarifications” on three main issues: protecting wages, regulating state aid and defining the rights of EU citizens in Switzerland. Both unions and the majority of the Swiss parliament are supportive of the government. The main concern is that a framework agreement that is perceived as dictated on behalf of Switzerland would have little chance of being ratified by a popular vote in the Swiss system of direct democracy.