Swiss edge toward possible ‘Swexit’ from EU bilateral pacts

Switzerland threatened yesterday (4 December) to impose unilateral curbs on immigration should it fail to agree with the European Union on limiting the influx into a country where nearly a quarter of the population is foreign.

After months of tough negotiations, Berne and Brussels are still gridlocked over how to implement a 2014 Swiss referendum for immigration quotas that would violate a bilateral pact guaranteeing freedom of movement for EU workers.

>> Read: EU-Swiss relations in turmoil after immigration vote

The bid to seal an agreement has been stalled by EU member Britain's similar demand to limit immigration from within the EU, making it hard for the EU to offer a preferential deal for Switzerland before it has settled matters with Britain.

With just over a year left before the quotas must come into effect, Swiss leaders have now taken the most dramatic move yet in the negotiations.

"If there is really no solution ... we would be ready for a suspension of a part or all of the bilateral agreements," Foreign Minister Didier Burkhalter told a news conference.

The government has asked its justice department to draft unilateral curbs on immigration by March 2016 in the event there is no breakthrough.

Swiss President Simonetta Sommaruga said this was not the preferred path and the country would continue EU talks in the hope of finding an agreement.

A European Commission spokeswoman said discussions were "difficult" but continuing and Commission President Jean-Claude Juncker would meet Sommaruga again before the end of 2015.

Immigration frustration

The February 2014 referendum, spearheaded by the anti-immigration Swiss People's Party (SVP), has jeopardised a host of other Swiss-EU treaties that govern bilateral economic ties with the country's largest trading partner and stand or fall together.

A study commissioned by the government found exiting key bilateral pacts could cut output by up to 630 billion Swiss francs (580 billion euro) by 2035, or as much as 7% of GDP.

Around 1.3 million EU citizens already live in the wealthy Alpine confederation and 300,000 cross the border daily to work. In 2014 nearly 111,000 nationals from the EU plus Iceland, Norway and Liechtenstein immigrated to Switzerland.

If Switzerland does act unilaterally by introducing immigration quotas, the EU could decide to scrap the bilateral accords to send a message to other countries, the chief economist for Switzerland at Swiss bank UBS said.

"The reaction could be harsh," said Daniel Kalt, "to prevent others from following Switzerland's example."