Cohesion Payments and Regulatory Costs
Summary: The Bilateral Agreements III entail estimated costs of approximately CHF 1.4 billion annually for the federal budget -- consisting of the cohesion contribution (~CHF 350 million), EU programme participation (~CHF 950 million) and regulatory costs. Critics consider these costs too high; supporters point to the estimated per-capita benefit of CHF 5,200 annually until 2045.
¶ Costs at a Glance
¶ Direct Costs for the Federal Government
According to economiesuisse, the annual costs amount to approximately CHF 1.4 billion [7]:
| Cost item | Amount (approx.) | Description |
|---|---|---|
| EU programme participation | ~CHF 950 million/year | Horizon Europe, Erasmus+, Digital Europe and others |
| Cohesion contribution | ~CHF 350 million/year | Regular contribution to EU cohesion fund |
| Total direct costs | ~CHF 1.4 billion/year |
Note: economiesuisse is the Swiss business federation and supports the Bilateral Agreements III. The figures cited come from their analysis of the negotiation result [7].
¶ Indirect Costs
In addition to direct payments, indirect costs arise [1]:
- Regulatory costs: Adapting Swiss laws and ordinances to adopted EU law
- Administrative burden: Particularly for SMEs that must implement new EU regulations
- Partial adoption of the Citizens' Rights Directive: Estimated additional costs of CHF 110-140 million annually for the federal government [7]
¶ Detailed Costs of the Union Citizens' Directive (UBRL)
The external regulatory impact assessment (RIA) by Ecoplan (May 2025) quantifies the costs of the partial adoption of the Union Citizens' Directive in detail [11]:
| Area | Additional Cases | Additional Costs/Lost Revenue |
|---|---|---|
| Social welfare | 3,000-4,000 persons/year | CHF 56-74 million/year |
| Supplementary benefits (EL) | ~500 persons | ~CHF 7 million/year |
| Tuition fees (universities) | -- | ~CHF 22 million/year |
| Public employment services | 3,700-8,800 job-seekers | CHF 9-22 million/year |
The additional social welfare costs arise because, under the UBRL, certain groups of persons are exempted from migration-law consequences when claiming social assistance. These persons incur "full costs" as they have no reckonable income -- unlike employed working poor who receive only partial support [11].
¶ Right of Permanent Residence
A key element of the UBRL is the right of permanent residence: after five years of uninterrupted, lawful residence with employment, EU/EFTA nationals receive an unlimited right of residence that is no longer linked to continued employment [11].
According to Ecoplan estimates:
- 570,000 EU/EFTA citizens will meet the criteria five years after introduction
- An additional 50,000-70,000 qualify each year
- Practical take-up: estimated 4,000-20,000 applications per year
The KGL Lucerne warns this means "potentially higher social costs and a certain loss of control over migration" [12].
Supporters emphasise that freedom of movement continues to apply only to employed persons or self-sufficient individuals, and persons without work or sufficient means have no right of residence [5].
¶ The Point of Criticism
¶ Cost-Benefit Ratio
Critics argue [1]:
- The CHF 1.4 billion annually is a high price over whose exact amount Switzerland has only limited control
- The cohesion contribution will be contractually established and is thus no longer a voluntary payment
- EU programme participation costs more than Switzerland spent on national replacement programmes
- Regulatory costs are difficult to estimate and could increase with each EU law adoption
¶ Cantonal Costs
The implementation of EU law burdens not only the federal government but also the cantons and municipalities, which are responsible for enforcement. Four cantons expressed reservations about the package in the consultation [5].
¶ The Counter-arguments
¶ Benefits Exceed Costs
economiesuisse argues on the basis of a study by BAK Economics that the economic benefits of the Bilateral Agreements III far exceed the costs [7]:
| Indicator | Value |
|---|---|
| Per-capita benefit (until 2045) | ~CHF 5,200/year |
| Cumulative benefit (until 2045) | ~CHF 45,700 per capita |
| MRA trade volume (2023) | >CHF 96 billion (72% of industrial exports to the EU) |
| Electricity system savings | up to CHF 1 billion/year |
Note: The BAK study was commissioned by economiesuisse. The figures should be read in the context of this commission.
¶ Costs of the Alternative
Supporters point to the costs of non-renewal: the erosion of existing agreements is already costing approximately CHF 1.3 billion annually according to Avenir Suisse (-> Erosion of the Agreements) [7].
¶ Programme Participation as Investment
The CHF 950 million for EU programme participation is not a sunk cost but an investment: Swiss researchers and companies receive in return access to funding and networks that yield returns many times the contributions [5].
¶ Sources
[1] UNSER RECHT (2026). Bilateral III -- what is it about? Information platform. [Open Access]
[5] FDFA (2026). Switzerland-EU Package (Bilateral III). Federal Department of Foreign Affairs. [Open Access]
[7] economiesuisse (2026). Bilateral III -- The best option. Dossier Politik. [Open Access] Note: Business federation.
[11] Ecoplan (2025). External RIA on the Partial Adoption of the UBRL. Commissioned by the SEM. [Open Access]
[12] KGL (2025). Position Paper on Bilateral III. SME and Trade Association of Canton Lucerne. [Open Access]
Last updated: March 2026