10 April 2015

Swiss attempt to renegotiate free movement has run into a brick wall

In February last year the Swiss narrowly voted in favour of a referendum mandating their government to renegotiate the country’s bilateral accord with the EU in order to impose quotas on migrants, including those from the EU. However, the EU has steadfastly refused to negotiate with Bern, insisting that free movement is part of a package deal also granting Switzerland preferential access to the single market, and which therefore cannot be dropped unilaterally. This has put the Swiss government in a bind – trapped between its constitutional duty and the inability to get the EU to even agree to sit down to talks.

In an interview with La Liberte, the Deputy Secretary General of the EU’s External Action Service, Maciej Popowski, has suggested that the way out of this impasse would be a new Swiss referendum on the issue, “probably at the end of 2016”. This is a familiar EU refrain – when a vote goes the wrong way from Brussels’ point of view, citizens should be given the opportunity to ‘correct their mistake’. This is very much the subtext of Popowski’s argument when he suggests that the Swiss ought to “change the logic… [and] see the huge benefits they have through their participation in the single market.”

The idea of a second referendum is not new – it was also suggested by Swiss President Didier Burkhalter last year, but in the context of a vote on the country’s wider agreements with the EU, not simply on free movement.

EU-Swiss relations complicated by more than the free movement question

Free movement is only part of the debate about overhauling the EU-Swiss relationship, which is increasingly seen as no longer tenable in Brussels and to some extent in Bern. The limitations of the current series of bilateral agreements – with the Swiss frustrated at their patchy market access (including for financial services) and lack of input into shaping new EU rules – have led to a new round of talks about establishing new forms of institutional cooperation which have been on-going since 2012.

As we noted in our recent Brexit report, the flip-side of Switzerland securing better terms may well be deeper integration with the EU more along the lines of the Norway model (but without formal EEA membership) and continued free movement. As Popowski argues:

No final agreement will be concluded in the institutional field before the problem of free movement is resolved.

The hope of the EU would be that by embedding the free movement question into the wider agreements as a take it or leave it deal, enough Swiss voters will be persuaded to accept it as the cost for continued market access.

EU-Swiss negotiations could have significant implications for the UK

It is not difficult to see that how the EU-Swiss negotiations end up could have significant implications for the EU debate in the UK, particularly if this precedes or coincides with the UK’s own EU referendum in 2017, if David Cameron is re-elected.

If the Swiss were to fail in their bid to reform free movement or even vote down a deal and lose some of their preferential market access, it would undermine the argument that the UK could opt-out of free movement while striking a comprehensive post-Brexit FTA with the EU. On the other hand, if the Swiss were able to negotiate some restrictions on free movement, however limited, it would ramp up the pressure on Cameron to get the same deal. It is precisely for this reason that Brussels has played and will continue to play hardball with the Swiss.

Ultimately, the similarities between the Swiss negotiations and what Cameron may be embarking on after the General Election illustrate the need to develop more flexible and durable arrangements for European cooperation, which could work in the interests of those countries formally outside the EU and those who seek less integration within it.