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Swiss voters back aid package for Eastern Europe

Swiss voters narrowly approved an €612 million ($800 million) aid package for Eastern European nations, highlighting divisions over funding for the poorest European Union members.

In a referendum, 53.4% supported a proposal to donate 1 billion Swiss francs ($826 million) over a decade to countries including Poland and Hungary that joined the EU in 2004. The funds will be used for development projects such as health care. “It's a good, if a narrow result,” said Michel Barde, secretary general of the Association of Small and Medium Sized Businesses in Geneva. “This is a confirmation of the policies of the past 15 years, since when Switzerland has always backed closer relations with the EU,” he said in a telephone interview.

Switzerland, Europe's eighth-largest economy with 7.5 million people, has sought to adopt some of the advantages of EU membership without giving up sovereignty. It cooperates with the bloc in areas including customs, criminal probes and tax issues. Since communism collapsed 17 years ago, Switzerland has offered Eastern European nations an average of 200 million francs (€126 million)a year for environmental and public health projects. Opponents of the aid package, including the anti-immigration Swiss People's Party, said the decision gives the government “blank check”, because it doesn't stipulate how the funds will be spent and that Switzerland has already handed 350 million francs (€189.5 million) to the EU to boost the economies of Romania and Bulgaria, scheduled to join the bloc in January. “Once again, financial policy has been forgotten,” said the party in a statement on its Web site. The measure “raises public debt and adds to the tax burden,” curbing economic expansion and cutting consumer spending power, it said.

The EU is Switzerland's biggest market and shipments to the EU helped exports to a record 16.6 billion francs (€10.48 billion) in October. The Swiss National Bank forecasts economic growth of 3% in 2006, the most in six years. “This decision is also in its own interests,” said European Commission President Jose Manuel Barroso. “Switzerland benefits already from privileged access to the EU's markets and so each enlargement benefits Switzerland,” he said in an e-mailed statement. “Today's result shows that the Swiss understand this.” The result proves that Switzerland wants to continue as “an active player in the region and a reliable partner with the other countries of the continent,” Swiss Economics Minister, Michelle Calmy-Rey, said in an e-mailed statement. A separate vote on whether to harmonize family allowance payments nationwide was also approved. The payments set at a minimum of 200 francs per month for each child until the age of 16. Currently each canton sets its own support, which varies between 160 francs and 444 francs per child per month. (Bloomberg)