Swiss politicians have a tough nut to crack this summer: the free movement of labour between Switzerland and the European Union. Brussels insists on the free market, including for wages, but Bern wants to keep high Swiss salaries at any price. It’s going to be fiddly, but there’s a tried-and-tested approach to finding a solution: more negotiations!
The government wants to achieve three strategic goals by the next parliamentary elections in October 2019:
- An overhaul of the country’s corporate tax system, following voters’ rejection of a first proposal last year;
- To make progress on reforming the pension scheme. An initial set of proposals was also thrown out by voters last year;
- To secure the future of the bilateral agreements with the 28-nation EU, Switzerland’s main trading partner.
These goals will be difficult to achieve, as there’s a disconnect between politicians and voters: both chambers approved the corporate tax and pension reforms, but both issues were rejected at the ballot box.
Switzerland’s political system is based on broad compromises in parliament so that solutions are not vetoed in referendums. But this traditional system is under pressure: confrontation increasingly prevails over consensus.
Today, every other decision in parliament relies on temporary alliances – often between very different political groups – which can push through their proposals with small majorities and without any consideration for the losing side.
Claude Longchamp is a senior political expert and one of Switzerland's most experienced and highly-regarded political scientists and analysts.
He founded the polling and research institute GfS Bernexternal link, which he headed until his retirement. Longchamp has analysed and commented on votes and elections on SRF public Swiss television for 30 years.
This text is part of #DearDemocracy, a platform on direct democracy issues, by swissinfo.ch. Contributors, including outside authors frequently share their views.
The opinions expressed here are not necessarily those of swissinfo.ch.
This winner-takes-all attitude in parliament has a price: the losing side can try to challenge decisions in a popular vote. This is precisely what happened with the proposed reforms of the corporate tax and the pension system.
Red lines and Europe
More than 25 years ago, Swiss voters threw out a framework agreement of cooperation with the EU: the European Economic Area. Since then, relations between Bern and Brussels have been structured with several sets of bilateral agreements, including the free movement of labour, the single border Schengen visa regime and financial contributions towards the development of Eastern Europe.
These bilateral accords have to be updated regularly to bring them in line with legislation both in Switzerland and the EU: for this reason, a new framework agreement between the 28-nation bloc and Switzerland has been under consideration for some time. It includes an arbitration body to rule in cases of legal disputes between both sides.
A point of dissent is the protection of the comparatively high salaries in Switzerland compared with those in EU countries. And again, finding a viable compromise in parliament may not be enough to win a possible referendum vote.
Parliament has found a solution for an arbitration mechanism. All political forces were happy with it – except the conservative right and its euro-sceptic wing, the Campaign for an Independent and Neutral Switzerland. For them, all legal agreements with other states or institutions puts Switzerland at the mercy of foreign judges.
The issue of salary levels is no less of a headache as there is a difference of 30% to 50% between wages paid in Switzerland and the EU for the same job. When an EU-based company wants to send their staff into Switzerland for an assignment, it currently has to give the Swiss authorities eight days’ notice. Brussels argues this rule restricts the free movement of people, a key political tenet of the EU.
Earlier this year, Foreign Minister Ignazio Cassis mooted a proposal paving the way for a compromise. His statement did not go down well at all – either among the political right with its anti-EU stance or the pro-EU left concerned about workers’ rights.
If such a compromise becomes part of a future framework agreement between Switzerland and the EU, both the left and the right would most certainly force a referendum. Under these circumstances, the government would stand no chance of winning, and relations with Brussels would sour for some time.
Cassis was elected to the cabinet last September. His critics on the left say his proposed concessions to the EU may just be a beginner’s mistake.
At the same time, the leftwing Social Democratic Party (one of four main parties represented in the Swiss government) argues that concessions of this kind are unacceptable and can’t be part of any form of negotiation with Brussels. In its view, such an agreement would undermine the successful long-term policy between employers and employees in Switzerland.
This system has been the basis for both the world’s most competitive economy and for the high level of salary in almost all sectors. It has also helped keep strikes to a minimum since the 1950s.
Optimists and pessimists
Political scientists in Switzerland have described this policy as a “veto game”. The political impact is not defined by the share of votes in an election, but by the ability to challenge an issue to a public vote, thereby overturning a decision by the parliamentary majority.
The trade unions, have plenty of experience of handling their veto power. To claim victory, they know that they also have to get opponents on board by integrating them into the political decision-making process.
A similar mechanism is in place for constitutional changes, such as people’s initiatives. They take not only a majority of votes at the ballot box but also a majority of the 26 cantons.
Pessimists may argue this is proof that Switzerland has no real political leadership. I take a different view – and I’m an optimist!
In the case of Switzerland’s policy towards the EU, the political reaction was mixed but it does have a common denominator.
The centre-right Radical Party wants to ensure access to the common EU market for Swiss companies but without Switzerland joining the 28-nation bloc. The centrist Christian Democratic Party has come out in favour of a framework agreement with Brussels, but it has called for additional safeguards for Switzerland over its legal sovereignty and labour market rules.
Even employers’ organisations and leading business groups have indicated that they are committed to protecting Swiss salary levels.
Based on this, the Swiss government in June once again confirmed the so-called red lines – its basic policy tenets. It called on employers and trade unions to sit down at the same table with Economics Minister Johann Schneider-Ammann to consolidate a common stance ahead of a new round of negotiations with the EU.
This is a highly delicate and complex task. But the Swiss political system has developed a negotiating culture precisely to tackle such challenges.
In an initial phase, all parties concerned meet for round table talks behind closed doors. Such a procedure makes it possible to openly discuss the issues in a bid to find common ground. But publicity through the mass media is not considered to be conducive at this stage for consensus building.
In the past, Switzerland made progress in talks with the EU when the Social Democrats and the Radicals formed an alliance, building a bridge between the centre-right and the left.
The formula for cooperation with the EU consists of liberal principles combined with social protection measures. This ensures that a solution does not have a strong bias either to the left or to the right.
But without the willingness for compromise – arguably the biggest asset in Swiss politics – the government will also fail to achieve its third main goal, following voters’ rejection of the tax and pension reforms.
Adapted from German by Bruno Kaufmann/urs, ts, swissinfo.ch/P2P