Switzerland should not join the European Union, but rather should make improvements on bilateral agreements made with member countries as a means of doing business. If Switzerland joins the EU, it will lose their ability to use monetary policy to control domestic output and employment. This is because joining will peg the Swiss Franc to the Euro and therefore Switzerland cannot regulate the Franc independently, (Daniel 2010). Switzerland would also run the risk of acquiring a higher unemployment rate. Immigration is a sensitive issue in Switzerland and it would make it difficult for unemployed workers in the Euro Zone to move in and out of Switzerland with ease.
It would also be difficult for Swiss citizens to seek employment in member countries furthering the problem of internal imbalance. Switzerland would also be exposed to the risk of inflation and potential loss of economic stability because price levels in the Euro Zone fluctuate more as compared to those of Switzerland.
Switzerland stands to gain if they joined the EU, they would increase and stabilize their volumes of exports, (Daniel 2010). This is because it will eliminate the growing challenges of bilateral agreements between Switzerland and trade partners. Membership to the EU will enable Switzerland to shield itself against exchange rate disturbances because it would adopt the currency of its largest trading partners. Membership will also allow Switzerland to lower the high price level of their goods and services attracting new trade partners.
Membership will cause Switzerland to benefit from a more stable economy because it reduces shocks that could arise from decreased demand for Swiss goods. Although Switzerland stands to gain some benefits from joining the EU, membership presents some setbacks that cannot be ignored. The economy of Switzerland tends to outperform that of the EU on several indicators; therefore, they should not join the EU rather they should embark on better and more comprehensive bilateral trade agreements.
- Daniel, M. (2010). Switzerland and the EU: Challenges and Uncertainties of Bilateralism.CSS Analyses, 81.
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