Tag Archives: Switzerland

Switzerland and Brexit

All eyes have rightly focussed on the recent Brexit vote and what it will mean in practice, in particular for the UK’s continued membership of the Single Market.  The key to this is most likely to be the free movement of people. Since its inception in the 1950s, the free movement of people has been one of the cornerstones of the Single Market, and its predecessor, the Common Market.

What is important to note is that a country does not have to be a member of the EU to be in the Single Market. You just have to sign up to the four key conditions: the free movement of goods, services, capital and people. You also have to pay a fee. This is the case with both Iceland and Norway, who are full members of the Single Market.

Switzerland is slightly different, in that it is not a full member of the Single Market, but has full access to specific sectors, but not the financial sector for example. Switzerland’s relationship with the EU is covered by a series of Bilateral Agreements and these include the free movement of people. However in February 2014, the Swiss voted in a referendum, by 50.3% to impose quotas on migration from the EU. The referendum gave the Swiss government three years to meet this requirement. That is until February 9th, 2017. For this to happen a new agreement with the EU needs to be reached very soon, for Switzerland to have the time to pass the necessary legal changes in time to meet this February 2017 deadline.

This is why what happens with Switzerland is potentially crucial to the UK’s hopes of remaining in the Single Market without the free movement of people. The omens are not good.  After two and a half years of negotiations no meeting of minds, let alone a new agreement had been reached. The most that might have been agreed with Switzerland would have been something similar to the emergency brake on immigration, that David Cameron managed to negotiate with the EU. However after the Brexit vote that is no longer on offer. And having been rejected by the UK, it is very unlikely that the EU would be interested in offering a similar deal to Switzerland.

Switzerland is already suffering the consequences of the 2014 vote, as it is no longer part of the Erasmus programme, and the EU has stalled on any further bilateral agreements. No new deal is in the pipeline and the reality is that without a new deal, all the Bilateral Agreements will come to a shuddering end in February 2017. This is due to the inclusion of a so called guillotine clause. If any part of the agreements is abrogated, the whole thing ends.

Switzerland is beginning to seriously run out of time. The Brexit vote ended the emergency break option. This leaves Switzerland between a rock and a hard place. Either it tries to hold another referendum, perhaps on keeping the Bilateral Agreements, including the free movement of people, or it prepares for life outwith the Single Market.

The Swiss experience does not offer much hope for those Leavers who assumed that the UK could get its cake and eat it. If there is to be a deal on ending or limiting the free movement of people it will now have to be offered to both Switzerland and the UK. As the previous offer – an emergency brake – has been rejected by the UK, it is not clear that there will be much stomach in the other 27 member states for any further concessions. Any limit to this foundational principle effectively ends the EU. As any offer would have to applicable to the other 27 member states.

The blindness of the Leave campaign as to what was happening in Switzerland is yet another example of how irresponsible the whole campaign was. Unfortunately it is the rest of us who will have to suffer the consequences. Unless you live in Scotland, where independence offers a way out of this mess.




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Why did Swiss vote to restrict immigration?

In Sunday’s referendum voters in Switzerland narrowly voted, 50.3%, in favour of imposing strict quotas for immigration from EU countries. It is not easy to make a great deal of sense about this vote. Previous attempts to restrict immigration, going back to 1968, have all failed. In particular the Swiss have voted four times since 2000 in favour of the free movement of people from the EU. So why the difference this time around? Though the referendum was sponsored by the right wing Swiss People’s Party (SVP) the support for the proposal does not seem to fit into the usual right wing, anti-foreigner campaigns to be found elsewhere. To try and understand the vote, here is a bit of context.

Switzerland is and probably always has been a country with a high proportion of migrants. Even before the First World War the percentage of immigrants was around 15%. Today is stands at around 23%, defined as those who do not have a Swiss passport. This compares to the EU average of 10%. However even this apparently high figure may not tell the whole story. Some 35% of Swiss come from a migrant background and given the difficulties and cost of acquiring Swiss citizenship many people born in Switzerland to migrant parents never take out Swiss citizenship. I know this from personal experience. My son-in-law was born in Switzerland to Italian born parents, but he only acquired Swiss citizenship a few years ago, after the birth of his son. This son, my grandson has both an Italian and UK passport, but as yet, no Swiss passport. I am not sure where either of them now appear in the statistics, but it illustrates how difficult it can be to determine just how many foreigners are living in Switzerland. Almost certainly less than 23%.

As regards the opposition to further immigration it is unlikely to have been based on the fear of unemployment and the threat of losing jobs. Switzerland has one of the lowest rates of unemployment in the world. Currently it stands at 3.5%. If anything Switzerland still needs immigrants to power its industries and tourism. It is also noticeable that, with the exception of Ticino, the Kantons with the lowest rate of unemployment, less than 2%, were the ones most in favour of quotas. On the other hand, the Kantons with the highest rate of unemployment, over 5%, voted against the proposal.

Though there has been a steady increase in immigration over the last decades, this has not translated into the kind of social and economic breakdown and violence that has from time to time disfigured countries such as the UK, France, the Netherlands for example. By and large the Swiss have managed to accommodate this large scale immigration quite remarkably well. Another curious aspect of the referendum vote is that, again with the exception of Ticino, on the whole Kantons with above average levels of immigration, Zürich, Geneva etc voted against restrictions. While Kantons such as Uri, Obwalden, Aargau etc with below average levels of immigration, all voted strongly in favour of quotas. An illustration of this voting pattern can be found here.

So what did cause the vote in favour of quotas for migrants from EU countries? One clue may come from the countries of origin of most immigrants. Two countries stand out as sources of immigrants – Italy and Germany. As noted above, the highest votes in favour of restrictions was found in Ticino, the one Italian speaking Kanton in Switzerland. While many Italians will have migrated to other parts of Switzerland, a significant number will have settled in Ticino, just across the border. Add in that Ticino has an above average level of unemployment and we may be discovering one of the factors in the vote. It is also worth noting that Ticino has always voted in favour of restricting immigration. The other fact to note is that apart from Zürich, Zug and Basel Stadt, all German speaking Kantons voted in favour of quotas. The reason for this may be similar to Ticino. The overwhelming majority of immigrants from Germany will have settled in German speaking Kantons. It is also a fact that in recent years the largest influx of migrants have come from Germany. This is a relatively recent, post 2000 experience for Switzerland and one that a lot of German speaking Swiss do not like. German language newspapers have regular articles on this issue. It has not gone unnoticed in Germany. The German online magazine Die Zeit entitled one of their reports on the referendum vote thus: Fuck you, Deutschland. It is a fascinating read which you can find here.

That headline perhaps best sums up the referendum result, though it should be matched by a smaller one reading Fuck you, Italy. Despite the best efforts of the anti EU brigade this was not in essence a vote about the EU. The result was massively influenced by anti German and anti Italian feeling. But, and this is the most fascinating aspect of the vote, the most anti German were Swiss Germans and the most anti Italian were Swiss Italians. For one reason or another a majority of Swiss Germans and Swiss Italians feel more threatened by their fellow language speakers than by other immigrants. This aspect of the result deserves a post on its own, but alas it will have to be by someone with more knowledge of this subject than I.

A few words about what will happen next. The short answer is nothing, as it seems there is a three year period before any changes to the current regulations need to be enacted. What these might be are completely unknown. Even the SVP had no answers to questions about how these quotas might be constructed. Will there be separate quotas for different sectors of the economy? for different regions of the country? Who will determine how high to set the quota? And most important of all, how can any quota system be compatible with the various Bilateral Agreements with the EU? By substantial majorities Swiss voters have approved these Bilateral Agreements, which enable Switzerland to participate in the Single Market. This includes the Free Movement of People. It is almost inconceivable that Switzerland can have one without the other. Perhaps someone should have pointed this out first. In any case I would not be surprised if a new Bilateral Agreement between Switzerland and the EU was to be negotiated, one which again included the Free Movement of People. This will then be put to the voters in another referendum in say two years time. It will be very interesting to see if those who voted to restrict immigration would do so again if it meant leaving the Single Market.

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What’s the Big Deal with Borders?

page4_1A few days ago George Osborne made one of his infrequent ventures north of the border to lecture us Scots on how damaging independence will be for us. The main subject this time was borders, or to be precise, the result of creating an international boundary between Scotland and England. The headline finding is that the average household will be £2,000 worse off in an independent Scotland than it would be if trade, capital and labour flows continued in the United Kingdom as it is. Now this is a pretty ludicrous and meaningless figure. Nowhere does Mr Osborne provide any evidence as to why trade, capital and labour flows would significantly change just because Scotland became independent. The attempts at international comparisons are far removed from the reality of Scottish – English trade. The experiences of Canada and the USA; Austria and Germany and the Czech Republic and Slovakia bear so little relation to the current situation in Scotland as to make them irrelevant. Even BBC Scotland’s Business and economy editor, Douglas Fraser, felt compelled to write that: “In short, there are assumptions built into this economic modelling by the Treasury which require a dose of freely traded salt.”

It is not at all clear why George Osborne and his Unionist colleagues and cheer leaders in the media have this obsession with borders. Other that is, than to issue yet more unsubstantiated scare stories. All countries have borders and yet international trade, capital and blabour flows have increased substantially since the end of the Second World War. In Europe in particular there has been a steady growth in international trade etc. Even though there are now more borders than before. So borders cannot simply be written off as all bad.

The most interesting case is probably Switzerland. With four international borders to contend with, Switzerland by Mr Osborne’s reasoning, should be one of the poorest countries in Europe. Instead it is one of the richest despite its four international borders. It is not as if these borders were high mountains or other impassable features. Most of the border between Switzerland and Italy, France, Germany and Austria is more or less completely flat and shows no distinguishing features. For centuries the Swiss have successfully traded across all four borders and have developed a very successful economy to boot.

A particular case in point is the Swiss city of Basel, which not only has one international border to contend with, but has two – the Swiss-German and the Swiss-French. Just how do they manage? To make matters even more confusing the Baslers don’t even have their own airport. They have to share one with the French city of Mulhouse. The airport is located in France. How dreadful! Even worse, one of the city’s major train stations is German – the Badische Bahnhof, which is the terminus for German state railways. The other main station is a joint French and Swiss station. The Basel Regional S-Bahn, the commuter rail network connecting suburbs surrounding the city, is jointly operated by the Swiss, German and French railways. Oh how complicated all this must be. Worries about foreign interference and currency uncertainties. It simply beggars belief that with all these problems Basel is one of the richest places in Switzerland. It is also home to many of the world’s most famous chemical companies, such as Novartis and Hoffmann-LaRoche. Borders and currency exchanges do not seem to bother them. What is perhaps even more relevant for Scotland is that the three countries around Basel have used their differences as a marketing tool to promote the whole area. Sometimes known as Dreiländereck in German or as The TriRhena region. It even has its own tourist website, which you can visit here.

The message could not be clearer – borders do not need to be a barrier to trade, capital or labour flows as Basel in particular and Switzerland in general show. Why should the Scottish-English border be any different? Why would patterns of trade that have developed over centuries suddenly cease? Especially when the SNP has indicated that it wants to maintain the existing currency union with the rest of the UK. With goodwill on both sides there is nothing in the experience of Switzerland and the rest of Europe to suggest that Scottish independence would lead to damaging economic consequences.

The key here is goodwill on both sides. The SNP and other pro-independence parties have clearly indicated a willingness to co-operate with the rest of the UK in a spirit of friendship and goodwill. It is only representatives of the UK government and Unionists who have called into question the willingness of the UK to co-operate with an independent Scotland. In the interests of clarity we should be told the truth. Will the rest of the UK work with an independent Scotland in a spirit of friendship and goodwill? As it already does with the Republic of Ireland. If the answer is yes, then there is nothing to worry about. On the other hand if the answer is no, then why would Scotland want to remain in a Union with people who want to treat us as enemies?

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Why Switzerland?

Flag-Pins-Switzerland-ScotlandNow that I am back in Switzerland for our annual holiday, it is a good time to reflect on the possible links between Switzerland and Scotland. At least as far as the referendum on Scottish independence is concerned. For the continued existence of Switzerland must be a galling afront to the members of the Better Together campaign. These Unionist are forever asserting that Scotland needs to be part of a bigger country – the UK – in order to prosper. Yet never a word is mentioned about Switzerland and how it continues to survive and prosper as a small independent state.

Switzerland is like Scotland a relatively small country in both landmass and population. In fact Scotland is almost double the size of Switzerland in area – 78,000 square km to 41,000 square km. On the other hand Switzerland has a much larger population – almmost nine million to Scotland’s five million plus. Overall not much between the two countries. The current constitutional set-up in Switzerland only dates back to 1848. Even its formal origins only go as far back as 1291, when the three very small Alpine cantons came together in a defensive league. By then Scotland had existed as a successful kingdom for some 400 years. Yet Switzerland is undoubtedly very rich and successful. It is also on the whole a country admired throughout for its contributions to peace and harmony in the world. How does Switzerland manage all this, all on its own?

Switzerland does not appear to have much in the way of natural resources, certainly nothing like the oil and gas from the North Sea. Its main strength seems to have been its location – as a transit zone for trade between Italy and Germany. It has since become famous for various industries – watches, chemicals in particular – and of course banking and tourism. In addition many international organizations have their headquarters in Switzerland. The Red Cross, FIFA and UEFA are just a few examples. Even the UN has a substantial presence in the country.

Perhaps its status as a small independent state is a key reason why Switzerland is so attractive to international bodies and to international companies? Perhaps Unionists might like to reflect on this before lecturing us all with yet more Better Together assertions.

But the biggest challenge to all Unionists is why Switzerland exists at all? After all the country is made up of three major language groups – Germans, French and Italians. Why on earth do these three groups not know that they would each be much better off by joining Germany, France and Italy respectively? Surely it is obvious that with the support of three of the biggest and most powerful countries in Europe, the various Swiss peoples would feel much more secure and prosperous? Alas for our Unionist friends this is all too obviously not the case.

In fact the exact opposite may be the reason for Switzerland’s continuing success. As a small independent state, its citizens are able to decide for themselves what is in their best interest and not have that decided for them in Berlin or Paris or Rome. And each language group can still participate in the relevant social and cultural unions that continue to bind them with German, French and Italian speakers everywhere. So in reality, it is the Swiss who get the best of both possible worlds. They have their political and economic independence and get to share in the wider social and cultural world of their fellow language speakers.

Sounds like a very good deal to me. Independence offers all Scots similar benefits as the Swiss enjoy – the right to decide for ouselves what is in our best interest and at the same time to continue with our social and cultural links with people in the rest of the UK and indeed in the wider English speaking world. Independence = Better For All.

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