Swiss monitors have recorded record numbers of Portuguese entering their country this year, adding to the record 66,200 EEA migrants from 2013. This adds urgency to Switzerland’s desire to renegotiate their EU relationship, and the decision they may face to cut all ties.
This February the 8 million Swiss narrowly voted to use quotas to limit EEA (i.e. EU, Norway, Iceland) migration. Christoph Blocher, Swiss Populist Party leader, argues the ‘road to poverty’ of migration is driving down wages, squeezing native Swiss out of jobs, and stultifying the economy. British readers might draw parallels with Civitas’ recent report by Robert Rowthorn, emeritus Cambridge economics professor, who contends that unlimited migration, plus poor integration and infrastructure investment, could weaken Britain in the long term.
However the EU, represented by British Baroness Ashton, rebuffed Swiss efforts to renegotiate one of the ‘four freedoms’, stating that Swiss ambitions were ’ irreconcilable’ with the 2002 treaty that allowed contracted or self-employed workers free movement through the Swiss border. Swiss President Didier Burkhalter again implored the EU to negotiate: ’[W]e want to talk about migration and we also want to discuss the whole make-up of EU-Swiss relationship for the future.’
If Brussels refuses to budge on renegotiation, Switzerland will have to actually break the treaty within three years – the first referendum constitutionally guarantees it. This will trigger a ‘guillotine clause’ attached to all the other Swiss-EU agreements (free movement of trade, services and capital). With this apparently straightforward dilemma, Burkhalter is offering his people a second referendum, this time essentially about the sum of Swiss-EU relations in the last 20 years. His Bern government, along with the business community, is convinced that the bilateral treaties are the basis of Switzerland’s prosperity, and campaigned hard against migrant quotas in the first vote.
This situation will have great influence on Britain’s EU debate. The Swiss are often an example of what we could achieve after exit: if it turns out that Switzerland either is not very free to control its borders, or can control its borders only to the detriment of all other economic aspects, it will cease to be an attractive model. Switzerland failing to address Brexit-supporters’ number one problem with Brussels would bode very poorly indeed.
Tomorrow Boris Johnson is set to announce confidence in Brexit’s viability. ‘A Win-Win Situation’, a report by his economics advisor Gerard Lyons and Volterra consultancy, says that staying in a reformed EU is best for Britain (London growing to £640bn by 2034 ), followed by well-negotiated exit (£614bn), both far superior to staying on current terms (£495bn) or, the worst possibility, leaving the EU for simple isolation (£430bn).
Switzerland might be looking at the last option. I applaud (and will continue to applaud) the little country’s ability to win big trade deals with the likes of China, but ultimately the EU is Switzerland’s largest market by far, and a reversion to tariffs will hurt Switzerland more than it hurts Europe.
