Swiss voters overwhelmingly rejected proposals yesterday (29 November) to boost gold reserves and impose strict new curbs on immigration, averting a potential nightmare for policymakers struggling with a popular backlash against the country’s open borders.
The referendums are part of a recent flurry of initiatives under Switzerland’s model of direct democracy that have threatened to undermine the non-EU member’s reputation for stability.
They reflect a growing public view that Switzerland is under siege from foreign workers eroding its Alpine culture, and from trading partners who have insisted in recent years that the Swiss dismantle their business model based on banking secrecy.
“The result of both today’s gold and immigration referenda show that the Swiss public want to pursue a coherent international economic policy and do not want to create new tensions with their EU neighbours,” said Reto Foellmi, Professor of International Economics at the University of St. Gallen.
The “Save our Swiss gold” initiative, proposed by the right-wing Swiss People’s Party out of concern the central bank has sold too much of its gold in the past, was rejected by 77% of voters, said Swiss broadcaster SRF.
The measure would have compelled the Swiss National Bank (SNB) to boost its gold reserves to 20 percent of its assets from around 8% currently, and banned it from ever selling the metal, threatening its ability to defend a €1.20 cap on the Swiss franc imposed at the height of the euro crisis.
The SNB welcomed the result with the refrain that it would continue to defend the cap, buying unlimited quantities of foreign currency and take further measures immediately, if necessary.
Spot gold was holding just below $1,167 an ounce on Sunday, down 3% this year.
“We anticipate a short-term sell off in gold, although a no vote was mostly priced in,” said Peter Rosenstreich, an analyst at Swissquote.
A separate proposal to cut annual immigration by three-quarters from current levels, put forward by environmentalist group Ecopop, was rejected by 74% of voters, SRF said.
The Ecopop referendum, which proposed capping the number of immigrants at just 0.2% of the resident population, was been seen as a proxy vote on Switzerland’s raft of treaties with the EU, its biggest trading partner.
The outcome allows the Swiss government to push ahead with its attempts to salvage these bilateral agreements after the approval of a previous proposal to introduce unspecified immigration quotas in February called into question its commitment to the free movement of people act – a key tenet of the treaties.
“The government has got more breathing space to negotiate with the EU,” said Regula Rytz, co-president of the Green Party.
However, the Swiss government said the state of play between Switzerland and the EU, which maintains free movement of people is non-negotiable, was unchanged after Sunday’s vote.
Switzerland’s system of direct democracy gives the electorate the right to force popular votes if they can gather enough signatures of support. A third set of proposals to scrap one of Switzerland’s biggest tax perks for expatriates was also defeated.