Swiss voters will have another say on relations with the European Union, Switzerland’s president said on Thursday, after valuable trade treaties with the bloc were put in jeopardy by a February referendum to curb immigration.
The Swiss government is struggling to salvage relations with the EU after the bloc last week dismissed any renegotiation of a 12-year-old pact guaranteeing the free movement of workers.
That pact, part of a package of seven which stand or fall together, was tripped up by a referendum in February, initiated by the right-wing Swiss People’s Party (SVP), to impose quotas on the number of foreign workers allowed into the country.
“It will be necessary for the people of Switzerland to vote again on what they want the future of the bilateral agreements to be … by the end of 2016 or the beginning of 2017,” President Didier Burkhalter said in an interview with Swiss television to commemorate the 1 August independence holiday.
Free movement of people is one of the fundamental policies of the European Union, and Switzerland, while not a member of the 28-nation bloc, has to uphold that principle in order to benefit from favourable trade conditions.
The accord currently in place between Switzerland and the EU covers economic and technological cooperation, public procurement, mutual acceptance of diplomas and licences, agricultural trade, aviation, and road and rail traffic.
The Swiss government, which opposed the quotas before the vote, is now forced to write the result of the referendum vote into law.
The referendum, which passed by less than 20,000 votes, has also unsettled the Swiss business establishment.
Security systems maker Tyco International and oil and gas services provider Weatherford are two firms which have already decided to move company headquarters out of Switzerland to Ireland, in part because of the immigration rules but also due to caps on executive pay.
Switzerland is the third largest economic partner of the EU, after the United States and China. Switzerland is able to participate in the EU's single market thanks to a series of bilateral agreements. This approach suits the Swiss confederation, but its complexity has become problematic for the EU and attempts were up to now under way to simplify the relationship.
Despite the country's wealth and economic success, immigration is a hot-button issue in Switzerland where the right-wing Swiss People's Party (SVP) has long blamed rising rents, crowded public transport and higher crime on an influx of foreigners.
Switzerland’s immigration policy is based on free movement of people from the EU and allowing a restricted number of non-EU citizens to enter the country. Swiss industry heavyweights such as drugmakers Roche and Novartis as well as banks UBS and Credit Suisse have traditionally looked outside the country for highly skilled and specialised staff.