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Monday, February 10, 2014

EU immigration: Why Ukip should pay close attention to what happens next in Switzerland

Our Director Mats Persson writes on his Telegraph blog:
In a referendum yesterday, the Swiss voted by a narrow margin in favour of restricting immigration from the EU. Switzerland is not an EU member but via around 100 agreements, Switzerland is partly integrated into the EU, including in the contentious area of free movement of workers.
Ukip’s Nigel Farage has been quick to stick the boot in, calling the vote "wonderful news for national sovereignty and freedom lovers throughout Europe." Equally predictable, Vivanne Reding – Vice President of the EU Commission – said that while "we respect the democratic vote of the Swiss people… The single market is not a Swiss cheese. You cannot have a single market with holes in it."

Which is a silly statement. One of the basic flaws with the Swiss trading relationship with the EU is precisely that it suffers from holes, including patchy market access in areas such as services, making it a sub-optimal model for the UK to follow. But Reding’s comments still highlight what an important test case this will be of the feasibility of the pick and mix relationship with the EU from outside, which the UK might have to adopt should it leave the EU.

Here it gets tricky. The Swiss-EU agreement on free movement was part of a bundle of agreements known as Bilaterals I, which also covered six other areas including market access for various Swiss exporters and firms, from trade in agricultural products to civil aviation. Crucially, it contains a "guillotine clause: which says that that the contents – including the market access – can only take effect together: if one of the agreements is terminated, the others would also cease to have effect. This sets Bern up for very difficult talks with Brussels. If the EU wants to play hardball, it could scrap the entire agreement.

There are a huge number of issues captured in the Swiss vote: support for immigration in Europe, the risk for an open economy in erecting new barriers to the world (think labour costs), how the EU responds to referendum results and much more. However, for the UK the implications are clear. If this escalates into other areas of Swiss-EU trade, including restricted market access, many in the UK will argue that a “pick and mix” deal with the EU will be hard to pull off. If, on the other hand, Switzerland was able to renegotiate its relationship to impose some form of restrictions on EU migration, however minor, those who favour UK exit would no doubt see it as a politically palatable precedent.

The Swiss referendum question doesn't specify what shape the immigration quotas would take, but only instructs the Swiss Parliament to draft legislation addressing the issue within the next three years. Much can still happen. However, no matter what, the EU will most certainly negotiate any revised deal with one eye firmly fixed on London, worrying about giving the Brits ideas. And for anyone with even the slightest interest in Britain’s future place in Europe, this is a key one to watch.


Anonymous said...

"If the EU wants to play hardball, it could scrap the entire agreement"

The EU needs to be careful not to overstep the mark. These are issues of the utmost importance and a serious wrong move (for example, cutting off Swiss/EU trade) would be tantamount to an act of war.

As stated before, let us all see if the EU can "live and let live". I doubt it.

As for the "guillotine clause" - does it cover guillotining MEPs, useless EU bureaucrats and officials like Viviane Redding and Manuel "Jabba The Hut" Barosso?


Anonymous said...

"The EU needs to be careful not to overstep the mark. These are issues of the utmost importance and a serious wrong move (for example, cutting off Swiss/EU trade) would be tantamount to an act of war."

Good luck with that Switzerland.

Seriously, rip up the whole agreement and start over. Let's see how the Swiss like Schengen border controls, MFN tariffs, and visas for EU travel and residence. That's the only way you'd get the UK(IP) to stay in line.

Rik said...

1. The Swiss had to correct a pretty stupid overall agreement.
Why anybody could have agreed with this in the first place? They simply have had themselves being blackmailed in to this thing and without a proper reason.
The Swiss buy more from the EU than the other way around. In absolute terms the EU is even without free movement the big benefactor.
Totally screwed up these negotiations before.

It also shows that the basic concept Hague is using simply sucks. You need to agree to things outside the EU framework and one a case by case basis. That makes it possible when at national levels things change to make corrections without basically go for completely new membership conditions. Even when it happens like here only one time it is a complete disaster.

2. The EU as expected acts very predictably. Simply another PR disaster in the making. Pretty relevant shortly before the elections. It basically ignores national demands, it ignores democratic decisions, it shows their arrogance (worst thing to have when you yourself are not delevering) and it shows itself a bad loser. PR disaster as far as credibility goes.
And the worst the EU remarks get the more newsworthy it will be.
This more or less guaranteed pro-reform PR until the election and long after that. And every EU moron seems to think he/she will have to meet the press on this one and needs to talk tough.
And as said exactly at the wrong time.

3. We will have to see what happens. The EUs focus might be on the access to the large market. However at the end of the day it is also about absolute amounts. There will be a lot of EU companies getting into trouble and especially German ones. From that angle seen any press story about a company with troubles is one and seen the amounts involved as said the stories are likely to be equal numbers from both sides. With the EU companies likely being in worst shape. And the finger directly pointing at the EU, the Swiss government is simply executing an electoral decision.

Rik said...

4. As said will be worthwhile to see if the UK can block the EU in cancelling these agreements. Might be a wise political move. Also imho for the EU as it simply otherwise will lose trade. The Swiss are now buying a lot of stuff at overinflated EU prices and will simply go oversea when trade barriers are started. Any EU action will see a reaction at government level but could alsoi be at businesslevel. And unlikely come back. Most of the stuff the Swiss buy is convenient stuff. Percentage of stuff where the EU has real pricing power is small (plus for a lot of it it has the CAP hanging at is pants which simply inflates prices).
So will have to see how this will play out somewhat longer term, especially as 3 of the most powerful EU countries will take most of the hit (Germany, France and Italy of which the latter 2 are hardly in good shape and in no way can allow losing 10 Bn trade or several 10Ks jobs).

5. Good news for the UK. It simply creates the platform for change (well contributes considerably to that.
It also sees the Swiss going full confrontational and first can have a look.
And it gains a new ally that is pro reform. Basically the Swiss want the same thing as the UK freetradezone, but restricted immigration (both effectively for local social political reasons).

5. Also shows that immigration cannot be avoided as a topic. Swiss immigration is roughly as good as it gets. Quality of immigrants in average is much higher than in the UK not even to mention France. Still the population doesnot seem to buy it.
Also caused by totally unrealistic predictions (8000 per year) while it ended up 10 times that). Simply a problem in the making and one that is present in several EU countries as well basically just need time to start to play up. Recipe for disaster to use unrealistic prognosis to get things accepted.
It looks clear if low end immigration keeps continuing this way it will longer term erode enormously EU support. Nearly everywhere you have around half the people that are against it you cannot keep ignoring them and not deliver economically at the same time like the EU is now doing. Simply creating your own death by 100 cuts.
The longer they wait the more permanent damage it will be doing.
The system set up for integration is very dangerous when it turns against you. One anti can block most new things and one out can create existential issues.

Rik said...

On the Wilders stuff.
There are 2 parts and they relate to each other.

1. The survey by Peil looks simply objective. Nothing wrong with that.
Main issues are that that Peil asks under a condition, while it is as much as possible presented by Wilders as being unconditional.
Which is simply not correct.

On the other hand a lot of media are referring to earlier polls (less clear as well) and state that there is in no way a majority for an exit. Which is in equal measures simply incorrect.

Also the other questions are interesting high 60s support for closed borders. 80s support for no Balkan social security. Clearly shows immigration as an Achillesheel for the EU.

2. The report. Focussing on several of the sensitive issues like Euro membership, own budget, own stimulus and immigration (also via amounts). And makes the difference between top end and low end. In the UK one better starts to make that difference as well if one wants to understand the discussion. Holland seems a lot further than the UK on this.
Links presnt EU forced cuts to cuts for real Dutch people (there where it hurts).

Red tape (huge amount) looks simply unconvincing. Savings are to be made, but more likely one EU red tape will be replaced by another local one.

Euro membership on the other hand looks low tbo. You simply need a financial sustainable situation to keep things quiet in the South longer term. Which means high transfers, either direct or indirect and either open or hidden. Probably indirect and hidden as that will be the most politically convenient. These will always be huge amounts. Report simply doesnot look strong on this.

3. We will have to see if this leads to a real discussion. Probably not Wilders&Co simply donot have the expertise toi hold it. Effectively so does the other side.
But having a discussion at all would be Wilders and/or reform positive as the EU side simply looks awful and requiring (urgently) reform. The more this gets in the open an gets media attention the better it would be for the reform case.
My idea is that Wilders will use it simply to make noise also before the EP election. He knows as his own electorate is too stupid to follow the discussion. As are the general electorate btw and nearly all of their politicians. And a good result will simply put pressure on the other parties.
Anti-Wilders block is simply responding in even for populist simplified terms so a discussion will not be started from that side.

4. One more point. Media refer often to a Dutch government survey that states that the EU contributes around 2000 Euro per person. And all the media I have seen state that the 2 reports contradict each other.
Which is nonsense but nobody sees it correctly.
The 2000 Euro pp is simply almost completely caused by freetrade and the Wilders report simply assumes that that will remain. Probably for good reasons. Especially Germany will not want to end the Custom union with Holland.
As said fully underlighted is the fact that all gains from the EU come from freetrade (and the rest is basically more counterproductive than an extra boost). Add the service sector and the report could have made more of this a lot more.
Simply shows that nearly all the stuff that p----s people off simply doesnot contribute economically. Effectively only causes an eroding popular platform. Simply EU pet projects which will very likely turn aginst them longer term. You cannot p--s off all the people all the time.

Rik said...

A seperate issue.

When none would want to see this whole issue in context it becomes more and more clear that the traditional media are simply rubbish.
Even de financial media simply produce a lot of unusable rubbish when things get complicated.
Take the Swiss thing. Polls were absolute rubbish: 7% lead gone on election day. And seen it before with the German election as well.
These mises are rather rule than exception.

Also anything that looks like a decent analysis (this is one) but most papers were simply appalling.
hardly anybody could place this is a context as well.

Same with the German Court case. As one paper described it media differ on the exact meaning. Well most of the media simply were dishing up a lot of rubbish would have been a far better description. Having the legal technical know how of a lawyer advising Salmond simply doesnot mean you have a legal opinion (well not a relevant one at least) simply only shows you havenot got a clue.

Anyway. Also makes clear that longer term opinions will be formed on inadequate info on one side, but also via other sources like thinktanks. Media are simply not fit for purpose when things get complicated. And with so many misses by basically all hard to see which one to refer to.
In other words agenda-setting will be way too difficult for nearly all (media and most politicians). Which also means that the ones able to make an agenda will have a strong position to start with.
Same longer term on providing the public and markets with info that doesnot suck and is properly analysed. Shorter term the traditional media will keep playing their role. Longer term they will become relatively unimportant as proper analysis is simply lacking.

Same with polls. Clearly pollsters have problem dealing with sensitive issues (on topics with a 'political correct' dimension). A lot could however be solved by them by simply getting the basics right. Asking unbiased questions, no implicit name calling etc. Simply isnot happening. Populist lag: like now pollster properly dealing with that. Clear when it can play just look at other cases and make adjustments or at least make a remark on that.

Anyway the 'new' way for polls simply seem to suck (telephone panels) apparently the people that are in such a panel simply are no fair representation of the population as a whole. But repeating the same mistakes on this time and time again is something else, it simply is not being good at your job.

Anonymous said...


"That's the only way you'd get the UK(IP) to stay in line"

That is all this is. A bunch of unelected and incompetent bureaucrats seem to have found themselves running/ruining Europe.

Woe betide any nation who doesn't think the same way and may want something different!

Sounds like 1939 all over again.


Bill Walker said...

"The Swiss buy more from the EU than the other way around. In absolute terms the EU is even without free movement the big benefactor."

This gets mentioned on a regular basis as if having a trade deficit gives you a better negotiating position with the EU than if you're a net exporter. By that logic I guess I have a pretty good chance of walking into Tesco at lunchtime and renegotiating the price of my sandwich? I have a massive trade deficit with Tesco after all...

Leaving muddled reasoning about the importance of trade deficits to one side, the truth is that we're talking about Realpolitik. If Switzerland lost access to the single market it would be a disaster for their economy. It would be unwise for the EU to allow it get to that extent, but the fact that the stakes are much lower from their perspective means they can play hardball.

That's simply how the world works and it's why the Swiss government are put in an impossible situation of dealing with an uncompromising EU and the demands of their electorate. It's an advert for why direct democracy can lead to the worst of all worlds - which is why UK politicians only bring up referendums when it suits their political agenda (UKIP are no different).