EU furious at Swiss vote on immigration quotas

SWITZERLAND - A backlash against a Swiss decision to curb immigration has begun even as Switzerland's President embarks on a tour of neighbouring capitals in an effort to persuade EU governments not to retaliate against his country.

This week the European Union postponed talks on Switzerland's participation in multibillion-euro research funding programmes following a decision by Swiss voters to introduce immigration quotas on EU citizens. Grave complications have also arisen over the ratification of European treaties.

French Industry Minister Arnaud Montebourg on Tuesday deemed the referendum vote a form of economic "collective suicide" by the Swiss while Foreign Minister Laurent Fabius said Paris planned to review its diplomatic ties with Berne.

"Switzerland must understand the importance of the principles of European construction and especially those concerning the free movement of people," read a terse French communique on Wednesday.

Swiss President Didier Burkhalter was warned during his talks in France that there was little room for compromise.

After his Tuesday meeting with German Chancellor Angela Merkel, she cautioned against any hasty retaliatory moves while Mr Burkhalter, in an effort to gain time for a compromise solution, told reporters: "At this stage, we are only talking about principles, the first stage, the beginning of a process of negotiations."

"There is no reason to stop everything because of a decision that is not yet in force," he added, noting that Berne had three years to work out how to implement last week's legally binding referendum vote.

But the fallout has hit faster than the Swiss government had assumed. Initially, it reckoned that with European Parliament elections due in May and anti- immigrant populists dominating the hustings, the last thing the EU would want is a debate on border controls.

The first hitch came at the start of this week, when Swiss officials notified the EU that it would not be able to ratify a treaty with Croatia, a country which recently became a EU member, largely because this would add to the pool of European citizens theoretically allowed to work in Switzerland.

In swift retaliation, the European Commission, the EU's executive, said it was postponing talks on Swiss participation in both the EU's €80 billion (S$138 billion) Horizon 2020 programme, which supports research in leading technologies, and its €14.7 billion Erasmus educational exchange scheme. The Swiss slice of these funds was €1.8 billion last year.

The EU also halted negotiations on a cross-border electricity deal.

And worse is in the offing, since the Commission is now threatening to revise all treaties with Switzerland, particularly those on free trade, a potentially deadly blow for a Swiss economy which exports half of its output to continental markets.

Many Swiss who backed the right-wing Swiss People's Party vote to restrict immigration blame foreign residents for rising rents and crime and crowded public transport.

But ratings agency Moody's warned on Tuesday that immigration curbs will hurt the economy, which is heavily dependent on foreigners across its sectors.

"Moody's believes that this has helped mitigate the adverse effects of population ageing and skilled labour shortages, thereby positively contributing to employment and economic growth," it said of the foreign inflow.

But the Swiss are not alone in their anti-immigrant attitudes: a continent-wide opinion poll by Blick, a local daily, found that 61 per cent of Germans, 69.7 per cent of French and no less than 77.5 per cent of British citizens would have adopted the same anti-immigration attitude as the Swiss, were they to be given the chance of voting in a referendum.

But that only makes Switzerland's predicament worse, for it means that the EU will be even more reluctant to discuss a deal with the Swiss which limits freedom of movement for labour, for fear that this would encourage a broader anti-immigrant backlash.

The negotiations with Switzerland will be arduous, not least because freedom of movement of labour is one of the EU's fundamental principles.

And the country's determination to keep its borders shut knows no bounds: another popular referendum is set for later this year, seeking to cap overall population growth through immigration at not more than 0.2 per cent a year.

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