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09 February 2014

Swiss vote is "pivotal decision with far-reaching consequences"


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In a popular vote in Switzerland, 50.3 per cent of the population voted for the introduction of quotas limiting immigration of EU citizens. This calls into question the EU-Swiss agreement and has been met with regret and dismay in the Member States. (Includes Swiss, EU & Member State reactions)


The popular vote in Switzerland of 9 February 2014 in favour of an introduction of annual quantitative limits to "immigration" (this includes cross-border commuters, asylum seekers, job seekers from the EU and third countries) calls into question the EU-Swiss agreement on the free movement of persons, requesting that the Swiss Federal Council "renegotiate" this agreement with the EU. Implementing legislation for this initiative will now have to be enacted by the Federal Council within three years. The Federal Council has indicated that the first stage of the legislative process is to be expected this year, so an official Commission memo

The BBC reports that the vote has shown up traditional divisions, with French-speaking areas in the west against the quotas, German-speaking regions divided, and the Italian-speaking canton of Ticino firmly in favour. In addition, cities with higher than average numbers of foreigners - Basel, Geneva and Zurich - voted against the quota proposal, while rural areas mostly voted for it. A quarter of the Swiss population are immigrants, although they tend to be European, especially from the bordering nations of Germany, France and Italy. In addition there are many who commute into Switzerland for work.

The BBC elaborated that there will not just be quotas but also restrictions on the right of foreigners to bring in family members and access social services. Businesses must give Swiss nationals priority when hiring staff. There will be a new clause in the constitution stating that migration must serve the nation's economic interest.

For Brussels, there are now no easy options. Free movement of people is one of its core principles. It sees it as integral to the single market. It has reminded the UK of this and if it embraces a compromise with the Swiss, other countries might chose to follow. And yet European officials will also be aware that with the European elections pending in May, there will be many anti-establishment parties pushing for the same restrictions as the Swiss voted for. Brussels will believe it has to defend a core principle, yet it will also be aware of how strongly the immigration issue plays with voters.

Philipp Hildebrand, former chairman of the governing board of the Swiss National Bank, argues in the Financial Times (subscription required) that "it is time to recognise that various dimensions of European integration no longer enjoy broad support. The European project needs to be reformed lest it lose its democratic legitimacy. Arguably, this should move in two directions. Eurozone stability depends on deeper integration among the 18 Member States, which should culminate in the establishment of a common fiscal authority. But parts of Europe do not want to follow the path of ever-closer union. For them, reform probably means refocusing on the original trade and customs union remit. Such a dual-track approach could make it possible for deeply independent countries such as the UK and Switzerland to find a form of membership of, or relationship with, the EU that stands a chance of winning lasting popular consent."

Fitch Ratings says that Switzerland's referendum on reintroducing quotas for immigration from EU countries increases uncertainty about the path of the country's economy and its property market. If EU retaliation resulted in a material adverse change to its current agreements with Switzerland, the latter's sovereign credit profile, and those of its banks and corporates, could be affected. The most damaging macroeconomic outcome would be if Swiss banks and corporations' access to EU markets were restricted, although this is not Fitch's baseline assumption.


Swiss reactions

In an official statement, the Swiss Federal Council interprets the outcome of this referendum as a reflection of unease with regard to population growth in recent years. Speaking in front of the media on Sunday, Federal Councillor Simonetta Sommaruga, head of the Federal Department of Justice and Police, described the outcome as a pivotal decision with far-reaching consequences. The constitutional text is formulated in a very open manner. The Federal Council will submit a proposal on its implementation to parliament as soon as possible. As the new constitutional text runs contrary to the agreement on the free movement of persons, the Federal Council will also enter into discussion with the relevant bodies of the EU and its Member States, in order to discuss the next steps and open negotiations. The constitutional provisions also allow a period of three years for these negotiations.

The President of the Swiss Confederation, Didier Burkhalter, explained on Sunday that the Federal Council will explore ways in which Switzerland's relations with the EU can be put on a new footing. At the same time, however, the president stressed that the agreement on the free movement of persons and the other bilateral agreements will remain in place until a new legal status has been established. The Federal Council will now analyse what consequences the change of direction resulting from today's decision will have on Switzerland's European policy.

Press release

Switzerland’s businesses say they need to attract employees from Europe to remain competitive, especially with an ageing population. One half of the nation’s trade is with the EU. The Swiss Bankers Association were disappointed, saying, "we urgently need to hold constructive talks with the EU to explain our position", reports Neurope.


EU Reactions

European Commission

"The European Commission regrets that an initiative for the introduction of quantitative limits to immigration has been passed by this vote. This goes against the principle of free movement of persons between the EU and Switzerland. The EU will examine the implications of this initiative on EU-Swiss relations as a whole. In this context, the Federal Council's position on the result will also be taken into account."

Press release

European Council

On 11 February, the Council discussed the results of the recent Swiss popular vote on the initiative “against mass immigration”. It underlined that the introduction of quotas on immigration from the EU citizens goes against the principle of free movement of persons between the EU and Switzerland as enshrined in the bilateral agreement in place.

Council results

Greek Presidency

"The free movement of persons is a core principle of the European project and a fundamental right of all its citizens, Swiss and citizens of the EU Member States that should be upheld and promoted. The EU will have to examine the implications of the outcome of the vote and is ready to work with the Swiss Government in order to find ways to tackle the issues arising therefrom. The Hellenic Presidency will follow closely this process with the EU institutions and its Member States."

Press release

EP President Martin Schulz

"I regret the outcome of the referendum and I take note of the closeness of the vote. I accept the democratic decision of the Swiss people. The Swiss government now has to work out which conclusions it draws from the referendum and whether it is possible to make this decision compatible with its international commitments in particular its agreements with the EU. The EU will honour its commitments towards Switzerland and expects its partners to do the same. Switzerland remains a key partner for the European Union."

Press release

Switzerland risks having to renegotiate its agreements with the EU, warned EP President Martin Schulz after voters backed the introduction of quotas for migrants in a referendum. "If Switzerland has to modify laws and to limit free movement also for EU citizens, then we have to react, discuss and perhaps negotiate the agreements", he said. "It is up to the Swiss government to decide if they suspend the agreements with us or not", said Mr Schulz. "As long as Switzerland does not react, the agreements exist."

Press release

EPP: freedom of movement not negotiable

EPP Group Chairman Joseph Daul MEP and Vice-Chairman Manfred Weber MEP said: "The free movement of citizens is a core principle of the EU. Switzerland has a binding bilateral agreement with the EU to accept and guarantee free movement for all EU citizens. The EU also guarantees free movement for Swiss citizens. We regret that the Swiss government will have to change the country's position on this crucial part of its relations with the EU. There is no room for negotiations, however, and the rules cannot be changed unilaterally."

Press release

S&D/Swoboda: "Swiss referendum is a worrying setback."

S&D Group president Hannes Swoboda commented: "The decision of a majority of Swiss voters to demand an end to the 'free movement of people' agreement with the EU today is a very worrying setback. I deeply regret this vote. Switzerland is turning its back on one of the most important elements of its relationship with the EU. This regretful choice has been inspired by a deeply populist and hate-fuelled nationalistic campaign. Immigration is not a threat but a valuable asset for the economic and social development of any modern state. If Switzerland suspends EU immigration, they will not be able to count on all the economic and trade benefits they have currently been enjoying; we will not allow for random cherry-picking."

Press release

ALDE: EU must address consequences

"We deeply regret this result", said ALDE Group President Guy Verhofstadt. "We believe that if this result is applied, it not only violates the agreement with the EU on free movement of people, but it would endanger the current high performance of the Swiss economy and standard of living."

While recalling the famous 'Guillotine-clause', Mr Verhofstadt continued: "We invite Switzerland, with the help of the European Union, to find a swift solution to this delicate situation before it gets out of hand."

Pat the Cope Gallagher (Fianna Fáil Party, Ireland), Chair of the European Parliament’s delegation for relations with Switzerland, commented: "I would like to underline that free movement of persons is the most important aspect of EU-Swiss relations, which is currently one of the closest relationships the EU has with a third country. In terms of next steps, the Swiss government needs to decide how it will implement the outcome of the referendum. The EU will then examine the implications of these measures on EU-Swiss relations and react accordingly." 

Press release

Greens/EFA: No quotas on the application of EU law

Greens/EFA co-president Rebecca Harms said: "Even if it only passed with a narrow majority, this referendum must lead to reflection and leaves Switzerland in a difficult situation. It is clear that this democratic decision has to be respected in Switzerland, but it is also clear that there can be no quotas or thresholds on the application of EU law and fundamental EU principles. The European Commission is right to defend this and the Swiss government will now have to work to find a viable solution, which respects this. However, the EU must also address the public unease about the future, which this referendum outcome is a symptom of."

Press release


Member States' reactions

France and Germany have voiced concern about Switzerland's vote to bring back strict quotas for immigration from European Union countries.

Germany

Chancellor Angela Merkel (CDU) said that the Swiss government now had to approach Brussels and "explain how they intend to deal with the result" to the EU, said spokesman Seibert. He stressed that the movement of people and economic freedom formed a "unit". At the same time Seibert stressed that the federal government "respects" the result of the referendum, reports Handelsblatt.

German Finance Minister Wolfgang Schäuble said the vote would cause "a host of difficulties for Switzerland". Reuters quotes him saying that fears about the free movement of people in Europe needed to be taken seriously, but he played down the risks of a strong performance by populist, anti-immigration and eurosceptic parties in European Parliament elections in May, saying this would only push bigger mainstream parties to work more closely together.

The German foreign minister, Frank-Walter Steinmeier, said the vote had to be taken seriously: "This proves a little bit that in this globalised world people feel more discomfort towards unlimited free movement of persons".

France

France's Foreign Minister Laurent Fabius said "it will hurt Switzerland to be inward-looking". He told French radio that it was bad news "both for Europe and the Swiss". Europe "was going to review its relations" with Switzerland, he added.

France's National Front, tipped to come first in the French European elections in May, was quick to congratulate the Swiss voters on their verdict, reports the Guardian.

[Reporting by BBC, critical German and French media reactions collected by NZZ (in German)]

UK (UKIP)

UKIP leader Nigel Farage said: "The Swiss people have taken advantage of their position outside the European Union to set their own immigration rules in their own national interest and I congratulate them for doing so. It is becoming more and more obvious to people across Europe that unfettered free movement from the poorest countries on the continent into the more advanced ones with higher living standards and welfare entitlements is unsustainable. Were the British people to be given their own referendum on this issue then the result would be the same - but by a landslide."

Press release

Spain

Spain's El Pais said the Swiss had not only questioned their agreement with the EU, but the vote "also reflects the populist and xenophobic agitation sweeping the Old Continent less than three months before the European elections".





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