ZURICH, July 12 (Reuters) - The head of Switzerland's influential SGB labour union federation has suggested the country could break a political impasse over a stalled treaty with the European Union by increasing its financial contribution to poorer EU members.
The idea floated by Pierre-Yves Maillard comes after glacial progress on the partnership treaty Brussels has demanded for a decade triggered a tit-for-tat row over stock exchange access and soured ties with Switzerland's biggest trading partner.
Labour unions are dead set against watering down Swiss measures to protect Europe's highest wages against cut-rate competition from EU workers such as plumbers, roofers and electricians on short-term, cross-border contracts.
This is a key demand from the European Commission, which wants non-EU member Switzerland to routinely adopt single market rules and give EU citizens the same rights they get at home.
In newspaper interviews, Maillard said Switzerland could increase its voluntary contribution to EU members in return for assurances that current systems for Swiss pay protections and state aid can stay in place.
"We could link the recognition of unilateral wage protection and the legitimate specialities of the public sector with better solidarity mechanisms," he told the Neue Zuercher Zeitung, suggesting the government pursue such a deal with Brussels.
It is uncertain whether Maillard's trial balloon will gain traction at home or in Brussels.
In Bern, resistance to the treaty -- Switzerland's top foreign policy issue by far -- ranges from the normally pro-Europe centre left to the stridently anti-EU far right, which both see the danger of the pact's infringing Swiss sovereignty. The government has asked labour and employers to sound out potential concessions over the summer.
The European Commission has ruled out re-negotiating the draft accord finished in November, but has said it was willing to clarify any open points before Commission President Jean-Claude Juncker's term is due to end on Oct. 31.
EU members in central and eastern Europe are upset that, amid the stock market row, the Swiss parliament has held up a 1.3 billion Swiss franc ($1.31 billion) "cohesion payment" to reduce economic and social disparities in the bloc and seen as the price of Swiss admission to the single market.
Maillard told the Tages-Anzeiger paper parliament should approve the money as a sign of goodwill while both sides try to work out a compromise that could come only after a Swiss referendum likely next year on abolishing the free movement of people from the EU, as demanded by the Swiss far right.
"The SGB will not accept any cuts at all in protecting wages," he added.
($1 = 0.9889 Swiss francs) (Reporting by Michael Shields Editing by Raissa Kasolowsky)
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