Switzerland could re-introduce annual quotas for immigration and renegotiate a free movement of people accord with the European Union if voters accept a rightwing initiative "against mass immigration" in February.
It’s the Swiss People's Party that forced the vote. Its president, Toni Brunner, told swissinfo.ch that rejecting the initiative would be as good as giving in to excessive immigration.
Since the progressive introduction of the accord between Switzerland and the EU granting free access to each other’s labour markets, up to 80,000 foreign workers have come to Switzerland each year. Some 75% of them come from EU countries.
The government and most political parties agree that the free movement of people has contributed to Switzerland’s prosperity. Industry as well as public and private service providers are dependent on labour. The export industry benefits from a relatively unbureaucratic access to the EU single market.
The initiative is an attack on the "values that have made this country the richest and most successful country in Europe," said Pirmin Bischof who represents the Christian Democratic Party in the Senate.
Switzerland is certainly prosperous. Unemployment fluctuates around the 3% mark, a rate, which other European countries can only dream about. With the growth of the resident population, gross domestic product (GDP) has risen continuously in recent years.
Brunner disagrees that GDP alone is a good thing, pointing out that while it has risen, the increase is due to additional consumption, higher demand in the construction industry and the development of new infrastructure to answer demand.
“Per capita income has not developed any differently than it did before the free movement accord. People have not grown richer. Unemployment rates have never dropped below those of 2001,” added Brunner. "Is that a healthy growth? I very much doubt it."
Back to the 1960s?
A stronger economy and a growing population have led to higher real estate prices, crowding on trains and major roads as well as wage dumping in some industries, triggering a backlash among some of those affected.
Against this background, the People’s Party launched its initiative nearly four years ago. It demands the reintroduction of immigration quotas and for the free movement agreement with the EU to be renegotiated, while also calling for a national preference when filling job vacancies.
"If this initiative is adopted, then Switzerland is sending a message that we want to get out of the bilateral treaty with the EU or at least say that it is not so important to us. We would go back to the 1960s, when we also had a quota system," said Bischof.
"Then companies would again have to file an application for every single permit and prove that they have tried unsuccessfully to fill the vacancy with a Swiss person. That would be a bureaucratic monster."
Brunner is not convinced that free movement accord has truly made a difference to the Swiss economy. “Even before its introduction, Swiss companies found workers. The question is whether in the future we want to control and be able to limit immigration again,” he added.
Bischof does not dispute that immigration can have a negative impact.
"We introduced back-up measures against wage dumping. But they were not properly implemented. This has to change," he said. “Basically, the initiative is no cure for phenomena such as full trains or high levels of construction.”
EU pacts ʻvitalʼ for companies
More than four out of five companies consider the free movement pacts as “important”, “very important” or even “indispensable”, according to a survey commissioned by economiesuisse and the country’s major industry associations, including those for banks, insurers, hospitals, as well as pharmaceutical, chemical and engineering companies.
Three out of four companies said that people from EU and EFTA states are “important” or “indispensable” for the success of their companies, BAK Basel Economics said on Monday. More than half of the companies said quotas would reduce their competitiveness, growth and profitability. Two thirds of companies said they would have trouble finding the necessary specialists.
Research institute BAK Basel surveyed 426 companies based in Switzerland to assess their view on the bilateral agreements between Switzerland and the EU.
Experts and politicians disagree over the consequences that a ‘yes’ vote on the initiative would have on relations between Switzerland and the EU.
According to the text of the initiative, Switzerland would have to renegotiate the free movement of people deal within three years or revoke it. This in turn could threaten other bilateral agreements with the EU.
For the EU, the movement of people is a fundamental freedom that is inextricably linked to the free exchange of goods, services and capital.
"Member states would never accept the separation of free movement from the other fundamental freedoms. I hope that the Swiss understand this,” European Commission President José Manuel Barroso said recently in an interview with the Neue Zürcher Zeitung newspaper.
"To go to Brussels and renegotiate is laughable. Everyone knows that and the People’s Party knows it too. The free movement of people is at the heart of the single market," said Bischof. "We can say we do not want it, but that would mean sealing off the country and going back to quotas again.”
Brunner reckons that the EU cannot afford to ignore the Swiss even if the accord is no longer valid. "In Switzerland, the EU has a reliable and economically important trading partner that you cannot just snub," he pointed out.
In 2012, Switzerland imported CHF20 billion ($22.5 billion) more goods and services from the EU than it exported.
Free movement of people
The agreement on the free movement of people between Switzerland and the EU came into force in 2002 and is a key element of the first package of bilateral accords between the two parties.
Under the agreement, nationals of Switzerland and EU member states are entitled to choose their place of work and residence within the territories of the signatories.
The Swiss electorate has voted three times so far on the free movement of people. In May 2000, it approved the first bilateral package and with it the free movement accord by a large majority.
In 2005, voters approved the extension of the treaty to the ten countries that joined the EU in 2004.
In 2009, the voters again approved its extension to workers from Romania and Bulgaria.
Voters are expected to have their say in 2014 on the planned extension of the accord to the new EU member state Croatia.
Relations between Switzerland and the EU are governed by 20 bilateral agreements and another 100 accords.
(Translated by Vincent Landon), swissinfo.ch