Fallout over referendum result may strain nation's access to EU market

The European Union warned it will review ties with Switzerland after the non-member Alpine country voted on Sunday to restrict EU immigration in a closely fought referendum.

Final results showed 50.3 percent of voters backed the "Stop Mass Immigration" plan pushed by Swiss right-wing populists.

The vote obliges the government to renegotiate within three years a deal struck with Brussels in 2007 that gave most EU citizens free access to the Swiss labor market.

It was one of a series of accords reached in 1999 after five years of talks that were seen as a way for Switzerland and the EU to enjoy access to each other's markets without Switzerland having to opt for full EU membership.

The fallout from the result could sink a raft of deals with the EU, including on the economic front.

Switzerland is ringed by EU member countries and does the bulk of its trade with the 28-nation bloc, but has remained steadfast about not joining.

The European Commission said it will assess EU ties with Switzerland, raising the prospect of restricted trade or other retaliatory steps.

"The EU will examine the implications of this initiative on EU-Swiss relations as a whole," it said in a statement.

Wolfgang Schaeuble, finance minister of Germany, Switzerland's top trade partner, said the result "is going to create plenty of problems for Switzerland in a host of areas". But he said it was also a warning sign of European globalization fears.

French Foreign Minister Laurent Fabius said on Monday, "It's a worrying vote because it means that Switzerland wants to withdraw into itself."

Swiss Foreign Minister Didier Burkhalter said he plans to tour European capitals to explain the vote and seek a solution, starting with Berlin.

"The people are sovereign, and a healthy system doesn't force the public to follow political authorities with outsized powers," Burkhalter said.

The Swiss government and a broad swathe of economic lobby groups fearing the EU fallout had battled the plan to curb immigration.

But under Switzerland's system of direct democracy, voters have the last word on a huge range of issues.

The French-language newspaper Le Temps noted how French-speaking areas and larger cities voted against the immigration curbs, while German-speaking and rural areas generally voted for them.

'We are ashamed'

Hundreds of people demonstrated against the referendum result in the capital Bern and in the city of Lucerne. "We are ashamed," shouted protesters in Bern.

The Swiss government said it will examine how to "recast relations" with the EU over coming weeks, but stressed that current immigration rules will remain in place until the new ones are drawn up.

Brussels has warned that Switzerland cannot cherry-pick from the binding package of deals, which were themselves approved in a 2000 referendum.

Besides free movement of labor, the pacts include equal access for Swiss and EU firms to public procurement tenders, smooth trade in farm goods, air transport and other sectors.

There have been warnings that ripping up those deals could also affect Switzerland's membership of Europe's passport-free Schengen travel zone.

It could also hit talks aimed at giving Swiss financial players more access to EU markets, and to press open Switzerland's banking secrecy, a hot topic as EU countries try to crack down on tax dodgers.

Such fears failed to faze the Swiss People's Party, which piloted the referendum.

Hawkish about sovereignty, it claims the country has been swamped by migrants.

"The people have taken back their destiny over immigration," said party ideologue Christoph Blocher, while leader Toni Brunner hailed "a turning point in our immigration policy".

The party said that with 80,000 EU citizens arriving a year - more than the 8,000 predicted before the rules were liberalized - the nation of 8 million people needs to apply the brakes.

It claimed that EU migrants undercut Swiss workers' salaries, and that overpopulation has driven up rents, stretched the health and education systems, and overloaded the road and rail networks.

There are around a million EU citizens in Switzerland, while some 430,000 Swiss live in EU member states.

The majority of recent immigrants are from neighboring Germany, Italy and France, as well as Portugal.

AFP - Reuters

(China Daily 02/11/2014 page10)