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Pros and cons of the Swiss-EU labour accord

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Five issues have dominated a key labour accord with the European Union, which the Swiss will vote on this Sunday.

swissinfo weighs the pros and cons of extending the Swiss-EU deal to the ten new member states.

Parliament and cabinet approved the agreement last year, but opponents, led by the far-right Swiss Democrats and supported by the rightwing Swiss People’s Party, collected enough signatures to force a nationwide vote on the issue.

The so-called accord on the free movement of people is part of a first set of bilateral treaties agreed between Switzerland and the old 15 EU members.

1. Rejection of the labour accord with the new ten EU member states is tantamount to dismissing the bilateral treaties with Brussels.

Strictly speaking there are no legal ties between the labour accord and the bilateral treaties. In practical terms everything depends on the reaction on a political level from Brussels.

It’s possible that the EU is not prepared to accept what it considers unfair treatment by Switzerland of its ten new members.

Supporters say Brussels could decide to cancel the labour accord between Switzerland and the 15 old EU member states in force since 2002. If this were the case the other six bilateral accords would become invalid.

Implementation of the deal on closer security and asylum cooperation (Schengen/Dublin treaties), approved by Swiss voters in June, could also be put off as a senior EU official intimated in public.

However opponents argue a “no” to the extension of the labour accord would not affect Switzerland’s relations with Brussels. They say it is also in the interest of the EU to retain the accords, particularly a deal on heavy goods trucks transiting through the Swiss Alps.

It is impossible to predict the reaction of the EU, but both scenarios are plausible. It’s a fact that Switzerland is the smaller partner in the deal and Brussels is clearly in a stronger position.

2. If the Swiss now approve the extension of the labour accord to the ten new EU members, it’s impossible to refuse any future deal with new EU states.

From a legal vantage point the result of the September 25 vote doesn’t set a precedent for relations with additional EU members. It is up to Switzerland to decide whether it wants to open its labour market to future member states.

The Swiss parliament, or Swiss voters, can decide whether they want to extend the labour accord to Romania and Bulgaria. The two candidates are due to join the EU in 2007. The same goes for Serbia and Montenegro, or Turkey, if they eventually join.

On a political level Switzerland will therefore face the same question again in the years to come: Could it refuse to grant Turkey or Romania the rights it has possibly extending to Poland and Hungary without being punished by Brussels?

3. The labour accord will trigger a massive influx of people from eastern Europe.

Supporters of the accord say an agreement in force with the 15 old EU members has not led to a wave of immigration.

But sceptics argue that such a comparison is not quite fair. They point out that Switzerland, as far as salary levels go, is likely to be more attractive for a Polish or Latvian worker than for citizens from France or Denmark.

However, Switzerland negotiated a series of safeguards to ensure a gradual opening of its labour market. It has the right to impose quotas for labourers from eastern Europe until at least 2011, and possibly even 2014. During the transition period Swiss residents will enjoy preferential status.

It is only after the end of the transition period that access to the labour market is unrestricted.

It is impossible to say today whether in future there will be a wave of immigrants entering Switzerland.

However, experts expect the economies of the ten new EU member states to grow quickly, creating numerous new jobs and increasing living standards. As a result countries like Switzerland would become less attractive.

Spain is a case in point. Before the country joined the EU in the 1980s thousands of people emigrated. But since then figures have dropped considerably.

4. Salary levels in Switzerland will come under a lot of pressure if cheap labourers from eastern Europe offer their services.

The Swiss parliament has adopted a series of so-called accompanying measures aimed at preventing salary dumping – the prime concern of many Swiss workers. The precautions include hiring 150 labour inspectors.

Nobody can say for sure whether this will be enough. Foreigners who settle down in Switzerland are not very likely to work for less money than their Swiss competitors, because they are subject to the same high cost of living.

But workers, who come to Switzerland for a short time on temporary assignments or as self-employed contractors, could be a problem.

5. Unemployed people from eastern Europe will come and take advantage of the welfare benefits and ultimately ruin Switzerland’s social security system.

Such concerns appear to be more in the realm of fantasy than reality. There are special clauses in the bilateral treaty designed to prevent such a scenario.

Jobless immigrants are in principle excluded from access to the Swiss labour market. Those who fail to find a job within six months of arrival must leave the country. It is not possible to claim unemployment benefits without having worked for at least 12 months.

swissinfo, Oliver Pauchard

The ten new EU members: Latvia, Lithuania, Estonia, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Malta and Cyprus.

Romania and Bulgaria are due to join the EU in 2007.

Other candidates: Turkey, Croatia, Serbia and Montenegro.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR