Switzerland Says Yes

Swiss voters said yes in a referendum this weekend to extending an agreement with the EU on the free movement of workers to include the EU-10 ‘new accession’ members (and here). Well sort-of. They voted by 56% to 44% to gradually ease restrictions on the working rights of citizens from these countries so that by 2011 (the same year as France and Germany) they will enjoy equality of access with those from other EU countries. (The only EU states to have opened their labour markets to the new members to date are the UK, Sweden and Ireland).

However much this – still rather limited – decision may be welcomed, there does seem to have been a fair amount of EU Commission arm twisting in the background, since Commission President Barroso has described the extension of the 1999 Switzerland-EU agreement on the free movement of people as an “indispensable element” of Swiss-EU relations with potential implications for trade and other issues.

Switzerland, like some of it’s most immediate EU neighbours – Germany, Italy, Austria – has a rapidly ageing population and a relatively high median age (39.77). Like Germany it has for some time had difficulty sustaining economic growth and internal demand: the Swiss economy only expanded by an average of 0.9% per year between 1991 and 2003, “less than any other country in the 30-nation Organization for Economic Co-Operation and Development“. Interest rates in Switzerland are stuck near historic lows at a Japan-like 0.75%.

In fact, despite the debate that this change has produced in Switzerland, the country has one of the highest proportions of foreign-born population in Europe (around 20%) and there seems to be some awareness that in the context of an ageing population immigration is a plus. According to RenĂ© Schwok, professor at Geneva University’s European Institute “Swiss voters know the prosperity of Switzerland is linked to immigration.” Not everyone agrees though. “The proponents have a huge responsibility now. They said the economy would grow,” said Hans Fehr, 58, a lawmaker representing the region of Zurich for the Swiss People’s Party. (cited in Bloomberg) “We’ll be watching them closely to see that they stick to it.” I’m sure you will Hans, I’m sure you will.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".