On 21 September, following heated debate, and in accordance with the results of the 2014 ‘mass immigration’ referendum, the Swiss parliament finally approved a bill giving locals hiring preference, thus avoiding the country being in violation of a 1999 EU bilateral agreement on the free movement of workers. On 9 February 2014 the country narrowly approved a referendum limiting immigration, and although binding the government could and did use some leeway over its implementation. No fundamental changes are expected and the law is set to come into force by the February 2017 deadline.

A delicate issue for the Swiss economy. After seven hours of intense debate, the National Council, the lower house of Switzerland’s Federal Assembly, voted in favor of the bill tabled by the government. The bill, which will govern a key issue for the Swiss economy, dates back to a referendum held in February 2014, when the nation was called to vote on the need for better control over mass immigration. The right-wing populist UDC party had drafted the proposal, which demanded that Switzerland be able to “autonomously” manage immigration, via “caps” and entry conditions that would be revised annually depending on the country’s economic interests. A slim 50.3% majority voted in approval. Switzerland’s Federal Council was thus charged with the task of drafting a law to come into by the 9 February 2017 deadline, and if necessary, renegotiate relevant international treaties within the same timeframe. The referendum result provoked concern both in Berne and in Brussels, as the introduction of unilateral conditions would violate a 1999 EU bilateral agreement on the free movement of workers (ALCP). European authorities made it very clear to the Swiss that violating this agreement would invoke the ‘Guillotine clause’ whereby all Switzerland’s EU bilateral agreements would then collapse. Swiss companies would also be denied their existing access to the European single market. Since then, the Swiss government has been grappling to solve a seemingly unsolvable issue. Ultimately, it has been through a broader interpretation of the 2014 referendum that the federal government and MPs have been able to reach this solution.

“Light” controls, compatible with Europe. The adopted bill does not explicitly include quotas or work-permit caps, however in situations of significant economic or social hardship, and when a specific immigration threshold has been reached, then the government can apply a policy of “national preference”. For example, employers could be obliged to directly inform Switzerland’s employment bureau (ORP) on any available positions. Should the situation become more acute, the Federal Council will have the right to take “corrective measures”. These measures are limited in scope and duration and are to be decided by a joint committee, comprising both EU and Swiss government representatives. One of the first effects from the parliament vote is that Switzerland’s temporary exclusion from the Horizon 2020 research programs and from the Erasmus university exchange program will be lifted. Furthermore, a number of multinational companies will be able to retake ownership of investments that had been frozen post February 2014, while a solution was being sought.