By John Revill

ZURICH (Reuters) -The Swiss cabinet on Friday approved a deal struck in December with the European Union aimed at deepening bilateral economic ties and has now launched a domestic consultation process.

Global geopolitical uncertainty made it a "strategic necessity" to maintain stable and predictable relations with the EU, Switzerland's top trading partner, the government said.

"By fixing our economic and political relations with the EU we increase our security," Foreign Minister Ignazio Cassis told reporters, adding that Switzerland belonged to Europe not only geographically, but also economically and socially.

"An old Arabic proverb says 'he who lives in peace with his neighbours sleeps without fear,'" Cassis said, noting that instability had become the "new normal".

Issues such as wage protections, immigration and electricity as well as the type of referendum to be held on the accord have all been settled over the last five months.

The consultation process will last until October 31, the cabinet said. After that has been completed, the package of measures will go to parliament in the first quarter of 2026, before a referendum is held, probably in 2028.

Studies show the Swiss economy could suffer a cumulative economic hit of more than 520 billion Swiss francs ($640.87 billion) by 2045 without an agreement, the government said.

Pursuing closer ties with Brussels is contentious in Switzerland, where nationalist opponents of closer integration say that it risks undermining the country's higher living standards and unique character.

Analysts expect the government to face a tough campaign to win a referendum, and critics were quick to hit out.

"Switzerland is facing a historically unprecedented treaty that will destroy the proven and successful foundations of sovereignty, direct democracy, separation of powers and federalism," said the campaign group Pro Schweiz.

($1 = 0.8114 Swiss francs)

(Reporting by John Revill, Editing by Dave Graham and Miranda Murray)