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Austria and Switzerland – Experience With and Without EU Membership

Author

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  • Fritz Breuss

    (WIFO)

Abstract

Austria and Switzerland have chosen to follow entirely different paths towards European integration: Austria, joining the EU in 1995, became a member of the Economic and Monetary Union in 1999. Switzerland, on the other hand, rejected the EEA treaty in 1992 and opted for a strategy of bilateral approach to the EU, with the result that today it is linked to the EU in key areas of economic integration. Austria, utilising its position of full economic integration, is able to exploit the potential integration effects of the single market and euro zone, but, being a full-fledged EU and euro member, is subject to the economic policy constraints connected with such membership. Moreover, rich EU countries tend to be net contributors to the EU budget. Altogether, after ten years of EU membership, Austria comes out on the positive side: its GDP appears to have grown by up to ½ percentage point p.a. more rapidly on average than might have been the case without EU integration. Switzerland, through its tardy and partial participation in the EU's internal market, gained only a few advantages from this type of approach to the EU. Nevertheless, its bilateral strategy allows it to pick out, through sectoral treaties, only those integration aspects that are in its national interest. In this way, Switzerland evades the disadvantage of being a net contributor to the EU budget and is able to continue pursuing its own economic policy. Still, on balance Switzerland appears to have suffered from welfare losses over the last decade.

Suggested Citation

  • Fritz Breuss, 2005. "Austria and Switzerland – Experience With and Without EU Membership," WIFO Monatsberichte (monthly reports), WIFO, vol. 78(10), pages 681-714, October.
  • Handle: RePEc:wfo:monber:y:2005:i:10:p:681-714
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    References listed on IDEAS

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    1. repec:kap:atlecj:v:45:y:2017:i:3:d:10.1007_s11293-017-9553-7 is not listed on IDEAS
    2. Ansgar Belke & Daniel Gros, 2017. "The Economic Impact of Brexit: Evidence from Modelling Free Trade Agreements," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 45(3), pages 317-331, September.
    3. Fink, Gerhard, 2009. "Comparative advantage, regional specialization and income distribution: The case of Austria in perspective," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 239-259.

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