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.
