The Swiss People’s Party (SVP) launched an initiative in August 2018 aimed at regulating and further restricting immigration to Switzerland. The Swiss Parliament and the Swiss Federal Council are encouraging voters to reject the initiative at the ballot box.
The issue at stake
If successful, this initiative will require the Swiss Federal Council to suspend the Agreement on the Free Movement of Persons currently in place with the European Union within a period of one year. In the event that the Federal Council and the EU fail to agree on a bilateral exit strategy within this timeframe, the Federal Council will be required to unilaterally terminate this Agreement within a period of 30 days following the original one‑year deadline.
Anticipated impact on EU/EFTA nationals’ access to the Swiss labor market
A majority of the Swiss population voting in favor of the initiative would render the bilateral Agreement on the Free Movement of Persons in place between Switzerland and the EU invalid. In this case, the Federal Council will be required to enter into negotiations with the EU for the purpose of bilaterally revoking the Agreement within one year and, if these efforts fail, to unilaterally terminate the Agreement. This would likely give rise to stricter immigration requirements for EU/EFTA nationals and thus place a strain on the Swiss economy.
The Agreement on the Free Movement of Persons enables Swiss employers to hire skilled workers from EU/EFTA countries in an efficient and unbureaucratic manner, which in turn serves to secure jobs and strengthen the competitive prowess of the local economy. The proposed initiative would jeopardize a large number of jobs in Switzerland by introducing work permit quotas and salary restrictions (among other things) for EU nationals and requiring employers to afford preferential treatment to Swiss nationals in hiring decisions. Aside from placing added restrictions on immigration to Switzerland, the adoption of this initiative would make it more difficult for Swiss citizens to work and reside in the EU and EFTA countries.
It should be noted that the current legislation governing the free movement of persons does not apply unconditionally, as foreigners are required to show that they hold a valid employment contract, that they are self‑employed, or that they possess sufficient financial resources to support themselves in Switzerland. Switzerland’s current immigration processes thus take place primarily by way of the labor market.
Additionally, the Agreement on the Free Movement of Persons is part of the Bilateral Agreement I and is thus legally interrelated with six other bilateral agreements in place between Switzerland and the EU (referred to as the guillotine clause). If the EU declines to enter into negotiations and the Federal Council is therefore required to unilaterally terminate the Agreement on the Free Movement of Persons, all six agreements under the Bilateral Agreement I will automatically cease to apply. In addition to restricting immigration to Switzerland, the adoption of this initiative is likely to adversely affect Switzerland’s trade relations in the crucial areas of agriculture, land and air transportation, research, and a variety of other sectors.
The Agreement on the Free Movement of Persons can be described as an essential pillar designed to establish and maintain close economic ties between Switzerland and the European Union. Switzerland has succeeded in accommodating the increased demand for Swiss goods and services since the introduction of the Bilateral Agreement I largely due to a sufficient availability of skilled workers and experts from outside of Switzerland. In light of this, trade relations between Switzerland and the EU countries would likely suffer in the absence of an agreement allowing for the free movement of persons across borders.
However, the adoption of this initiative would not have any direct impact on immigration from non‑EU/EFTA countries or on EU/EFTA nationals on assignment in Switzerland for more than 90 days, as these foreigners are already excluded from the benefits offered by the Agreement on the Free Movement of Persons.
In a nutshell, the proposed initiative calls for a fundamental overhaul of Swiss immigration law and seeks to override the Agreement on the Free Movement of Persons and prevent Switzerland from entering into any new international treaties that allow for the free movement of persons across borders. It should be emphasized that the Agreement is vitally important to the Swiss labor market and to enabling the Swiss economy’s robust growth. Due in part to the demographic shifts and digitalization trends currently unfolding, the Swiss economy would stand to benefit greatly from continued access to the EU/EFTA area’s workforce, as this would empower Switzerland to compete on a level playing field in today’s fiercely‑contested global economic environment.
On 17 May 2020, the Swiss people will vote on whether to adopt or reject the proposed initiative. We are closely monitoring the developments surrounding this initiative and will provide updates on this blog whenever new information becomes available.