Switzerland slams the door on immigrants

The importance of Switzerland’s vote to reimpose quotas on EU immigration on Sunday “cannot be underestimated”, says Allister Heath in City AM. The referendum result, which was decided by just 50.3%, is a “major victory” for Eurosceptics who dislike every aspect of the EU. British Eurosceptics who want to renegotiate a new relationship with the bloc will “be watching carefully”.

As for Switzerland, the demand for housing will now fall – which is what voters wanted – but it will also be “hit by labour shortages, which could cut growth, push up wages, inflation and interest rates, further boosting the Swiss franc and hitting exports”.

Not so fast, says The Times. “It is likely that restrictions on dependants of foreign workers will fall foul of international law, so this case may now be heading for the courts. Retaliation by the EU is also likely.” There are around 100 bilateral agreements between the EU and Switzerland, so the EU’s “potential for leverage is high”.

Switzerland is heading for a “punch-up” with the EU, agrees Hamish McRae in The Independent. Relations are already “strained” because of Switzerland’s attractive tax regime for multinationals.

The country now stands accused of cherry-picking in relation to the EU and, technically, it can’t do that. “There is a clause in Switzerland’s EU agreement that means that cancelling any one part of the deal renders the other void.”

With the Swiss unemployment rate at 3.2%, compared to an EU average that is double that, Switzerland’s open-door policy has been a “great success”, says The Times. Since 2012, the population has risen by a million to eight million and some 20% are now foreigners. No wonder business is “deeply disturbed” by the vote.

As are the Swiss hospitals, schools and colleges, tourism and the building industry, which rely on EU workers, says Claudia Gnehm-Laubscher on The Guardian website. If one bilateral agreement is broken, the EU will deem the rest invalid too, with “potentially devastating” consequences.

The students on EU exchange programmes; the energy companies that want to sell storage capacity to the EU: their future is now called into question. If Britain, the Netherlands and other countries think they can copy the Swiss, “they are dreaming”.

66% off newsstand price

12 issues (and much more) for just £12

That’s right. We’ll give you 12 issues of MoneyWeek magazine, complete access to our exclusive web articles, our latest wealth building reports and videos as well as our subscriber-only email… for just £12.

That’s just £1 per week for Britain’s best-selling financial magazine.

Click here to take advantage of our offer

Britain is leaving the European Union. Donald Trump is reducing America’s role in global markets. Both will have profound consequences for you as an investor.

MoneyWeek analyses the critical issues facing British investors on a weekly basis. And, unlike other publications, we provide you with the solutions to help you turn a situation to your financial advantage.

Take up our offer today, and we’ll send you three of our most important investment reports:

All three of these reports are yours when you take up our 12 issues for £12 offer today.

MoneyWeek has been advising private British investors on what to do with their money since 2000. Our calls over that period have enabled our readers to both make and save a great deal of money – hence our position as the UK’s most-trusted investment publication.

Click here to subscribe for just £12