Switzerland Looks Set to Reject 10-Million Population Cap

(Bloomberg) — Switzerland looks set to reject capping its population at 10 million people, a radical proposal that would have marked an escalation in efforts by wealthy nations around the world to put strict curbs on immigration.

In a plebiscite on Sunday, 55% of Swiss voted against the idea, according to projections from public broadcasters SRF. Government results as of 3:28 p.m. Zurich time showed the ‘no’ side ahead with 53.8%.

The ballot on Sunday was the culmination of months of campaigning in which right-wing groups said Switzerland’s rapidly rising population is causing overcrowding and straining the country’s resources. The population isn’t too far off their proposed limit, having risen by almost 2 million this century to 9.1 million.

The vote result will be a relief to businesses after multiple high-profile executives had warned that setting a fixed upper limit on the number of residents, never tried in a modern economy, would cut off vital access to foreign labor and hurt business and investment. The government and the majority of lawmakers in parliament had also opposed the idea.

The concerns of firms like Roche Holding AG, Nestle SA and UBS Group AG had been heightened earlier this year when polls showed that proponents of the cap were ahead for large parts of the campaign. The ‘yes’ side lost that lead in the final polls, but remained close to 50%.

Supporters led by the Swiss People’s Party, or SVP, focused their push on sustainability, casting arrivals as stretching the country past its natural limits. They framed the population cap as a solution to high rents, crowded trains and overbuilding, messaging that connected with many people.

Even with the defeat, the sizable support indicates ongoing unhappiness with the level of immigration, which will encourage the SVP and others to continue to try to find ways to introduce limits. That’s been a recurring theme in Switzerland going back decades, where people have used the country’s direct democracy system to repeatedly propose initiatives to stem the inflows of people.

SVP lawmaker Thomas Matter, a key figure behind the population cap, said “even a narrow ‘no’ vote is a sensation” because it was a “David versus Goliath campaign – everyone against one.”

Indeed, support for the measure was much stronger than the SVP’s share at the 2023 general election, where it came in first with 27.9% of the vote.

Turnout of 58.5% also was high — the long-term average since 1990 is just 44.4%.

The SVP’s position aligns with the anti-immigration mood seen in multiple countries around the world and which politicians like Donald Trump in the US, Marine Le Pen in France and Alice Weidel of Germany’s AfD have tapped to grow their support. It’s led to many governments introducing new restrictions and tough crackdowns on migrants, some controversial.

Economic Warnings

In addition to warnings from some of Switzerland’s biggest corporates, many economists had said the population proposal risked having a significant impact on growth and prosperity. A government study estimated that output at the end of the century would be some 12% lower if the measure was passed.

Economiesuisse, Switzerland’s main business lobby, welcomed the result, stressing that sufficient access to skilled workers is essential for Swiss companies. Still, it also voiced understanding of voter discomfort with immigration.

“The public has shown politicians a yellow card,” the organization said in a statement. “We need consistent enforcement of asylum laws and better utilization of the domestic labor force.”

The rejection of the proposal also avoids a rupture with the European Union, which surrounds Switzerland and is by far its biggest trading partner. A population cap would have threatened the free movement of people between Switzerland and the bloc, and that could have ultimately severed the access of local exporters to the EU’s common market.

Lukas Golder, head of pollster gfs.bern, said that the expected ‘no’ vote is in large part due to French-speaking Swiss in the country’s western regions rejecting it by a wide margin. In cities there — including Geneva and Lausanne — uncertainty over the potential fallout of the cap for the economy and the relations with the EU outweighed support in rural areas.

The economic risks look to have been enough to persuade the Swiss not to take chances on such a dramatic measure. It follows a trend of voters repeatedly siding with business interests in the past.

Late last year, they rejected a special inheritance tax on super-rich residents and previously blocked more mandatory vacation days and a national minimum wage. Under direct democracy, ballots are held as many as four times a year.

Swiss voters’ discomfort with immigration is set to influence important future ballots, including on a package of agreements intended to put relations with the EU on a firmer footing. Ahead of the vote — expected in 2027 or 2028 — lawmakers have proposed to tax immigrants to prevent an overcrowding of the country.

In a separate national ballot, Switzerland looks to have voted for making it harder to replace mandatory military duty by opting for civil service work. The government had proposed tighter rules to ensure sufficient staffing for the army, prompting a polarizing debate against the backdrop of rising geopolitical tensions.

(Update with turnout in 10th, business lobby in 13th paragraph)

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