Overeenkomst over 9 sleuteldossiers betekent diepgaande integratie Zwitserland in Europese Unie (en)

EUOBSERVER / BRUSSELS - Switzerland and the EU today signed nine bilateral agreements at the first ever Swiss-EU summit in Brussels.

The agreements - which cover a range of topics, from tax to the free movement of people - were hailed by both sides as an important step forward in EU-Swiss relations.

Commission President Romano Prodi went so far as to say that the agreements moved Switzerland closer to the EU.

The agreements were "undoubtedly a contribution at some stage in the future to Swiss participation in the EU", said Mr Prodi, cautioning however that "Switzerland will decide when the Swiss people decide".

For his part, the Swiss President, Joseph Deiss, was slightly more guarded saying that the agreements were a separate issue to accession.

But both leaders were at pains to stress the mutual importance of relations.

Mr Prodi paid tribute to "our closest neighbour - geographically, culturally and politically", pointing to the fact that Switzerland is the EU's second biggest trading partner - ahead of the US and just behind Japan.

And Mr Deiss said, "We might not be at the very centre of Europe but we're definitely at the heart of Europe". He continued, "We're beginning a new era of relations between our two entities".

Tricky tax

Switzerland agreed to a long-awaited deal to allow EU residents holding secret Swiss bank accounts to be taxed, after the EU overcame internal differences on the issue last week.

This is seen in Brussels as a major step towards combatting tax evasion.

However, the deal may not enter into force on 1 January as planned because of a slow ratification on the Swiss side.

There are a number of stages before the law will be implemented - one of which could be a referendum. And Mr Deiss admitted, "It will not be possible to guarantee we will be ready".

Switzerland will also join the EU's Schengen area - which would allow free movement of people across EU borders. However, it will not be obliged to share information about tax evasion - a major concern for Berne.

The landlocked European country is expected to join the Schengen zone in late 2006 or early 2007.

Amongst the other agreements signed today, Switzerland has also promised to pay 650 million euro over five years to support the economic and social cohesion of the enlarged EU.

Mr Prodi also announced that regular meetings between the EU and Switzerland would take place from now on and that the European Commission would be opening a representation in Berne.