Swiss confront the costs of curbing foreign labour

Werner Bernhard, who was selling roasted chicken from a cart across from the train station in this prosperous village north of Zurich, is eager to see Switzerland close its borders to some of the thousands of European Union citizens who come here every year.

“We don’t need the EU,” he said, making it clear that he could not care less if the recent referendum on limiting immigrants coming into Switzerland throws his country’s overall relationship to the bloc, the world’s biggest market, into doubt.

“Look at that parking lot in front of us,” Bernhard fumed. “It’s full of German licence plates. They take the train to Zurich and come back in the evening with their pockets full of money. There are foreigners all over the place. And I can’t get a job. Do you think I want to sell chickens? I am a graphic designer.”

One month after the Swiss voted to clamp down on immigration, putting the country at loggerheads with the 28-nation European Union and its policy of free movement of people, Switzerland is confronting the practical complexities and potentially substantial economic costs of turning the anti-immigration vote into new laws and regulation — and coming to terms with citizens like Bernhard who were, before the vote, somehow rendered invisible by this country’s booming economy.

The vote, a referendum on a measure put forward by a far-right party, was not initially taken seriously by opponents. But it passed by a slim margin, requiring the development of quotas for foreigners and priority hiring for the Swiss. Now the government is technically obligated to go forward with these policies within three years.

Even experts in Swiss constitutional law are scratching their heads, wondering what Swiss officials could come up with that might satisfy the referendum and yet keep the country in the good graces of the European Union.

Switzerland is not a member of the bloc, but it is the country’s main trading partner.Such uncertainty is already prompting discomfort in Switzerland’s large multinational business community, which has been able to enjoy both the country’s low tax rates and the ability to pluck talent from anywhere in Europe. Up the road from here, the mayor of Neuhausen, Stephan Rawyler, said he had heard one multinational company in his village say almost immediately that plans to expand there had been canceled. The company will probably turn to Ireland instead.

“It worries me very much,” Rawyler said. “About 20 years ago we lost about half our jobs, and it was very difficult.” Swiss officials have been trying to calm the waters with the European Union. But many officials here worry that no matter what happens, Switzerland will pay a heavy cost for the anti-foreigner vote.

“We used to be seen as a place of stability, which is what businesses like,” said Jacqueline Fehr, a member of the Social Democratic Party who represents Zurich in the lower house of Parliament. “But this referendum may have changed that even more dramatically than we realised. If you are an outsider, you have to wonder, ‘What will be the next crazy decision coming out of Switzerland?’ ”Switzerland, through a series of bilateral treaties with the European Union, has had virtual member status, but in exchange it agreed to adhere to the union’s core principles, including the freedom of movement of goods and people within the bloc. With far-right parties increasingly questioning these principles, union officials have already shown an inclination to stand tough.

Quick reactionWhen, shortly after the vote, Swiss officials backed away from a routine treaty that would have given Croatians, as new European Union members, access to Switzerland, the bloc reacted quickly. It notified the government that Swiss students would no longer be eligible for its prestigious Erasmus student exchange programme and that its scientists would be excluded from competing for European research funds — more than 80 billion euros, or $111.5 billion, over the next seven years. “If you are a really ambitious scientist in Slovakia now, would you come here?” Ms. Fehr asked. “I’m not sure you would risk it.”

On the surface it is not hard to see why the Swiss government was taken by surprise by the vote. While much of Europe is mired in debt and financial difficulties, all seems extraordinarily well in Switzerland, where unemployment is negligible. Even among young people, the unemployment rate is only 5 percent, compared with about 50 percent in Spain and Greece, for instance.

To some degree, it is Switzerland’s prosperity, along with the resulting crowded trains, urban sprawl and an ever-growing number of foreigners, that has caused the unease among the Swiss who voted for the new limits on immigration. Foreigners now make up 23 percent of the population, a huge number compared with other European countries like France, which has about 6 percent, and Germany, which has about 8 per cent. Last year 80,000 foreigners arrived in Switzerland, roughly the same amount as in every year for the last decade.

On top of that, thousands more drive over the border every day from France, Germany and Italy to work here, eager for Swiss salaries that are often higher than what they can earn at home. Switzerland has hosted many foreigners at other points in its history, such as when thousands of construction workers helped build tunnels through the Alps. But those immigrants created wealth and opportunity for the Swiss.

Recently, immigrants have been more educated, multilingual and managerial, leaving some Swiss, like Bernhard, feeling that they are losing out.

“On a macro level everything is fine,” said Rudolf Minsch, a board member of Economiesuisse, an umbrella organization for Swiss industry associations. “But on a micro level everybody has a story, a son or an uncle who didn’t get the job. And of course, they don’t really consider whether they were as qualified as they should be.”

In Thayngen, which is near the German border and home to several multinational companies, including Unilever, the percentage of those voting in favour of the referendum was among the highest in the country, at 68 per cent.

“Everything is just over the top,” said Beat Schneckenburger, a retired banker in Thayngen who was watching over his grandchildren in the village playground. He believes that many people voted for the referendum, as he did, to protest the rapid changes the country is experiencing, without truly expecting it would pass. “There is no way to control the number of people coming here. Would the U.S. put up with that? We will be able to get the workers we need without Brussels telling us what to do.”

Before the vote on Feb 9, surveys indicated that the referendum would be voted down. Instead, the referendum passed, barely, with 50.3 per cent of the vote, a number that masks huge regional differences. The French-speaking part of the country voted heavily against the referendum. In German and Italian areas, particularly in rural regions, the vote was overwhelmingly in favor of putting a lid on immigration.