Hobson’s choice?

Christian Democrat (CVP) poster on the Freizügigkeit referendum. Photo taken by me.

On the 8th February 2009 Switzerland will vote on a referendum which will determine whether the state continues or re-negotiates its freedom of movement agreement with the European Union, of which it is not currently a member.

I point out the latter, rather obvious fact of its non-membership because in the past year, the relationship between the EU and Switzerland has progressed from something best described as blissful ignorance punctuated by the occasional bust-up, to more of a on-and-off relationship with equally common instances of shouting matches and group-hugging.

Switzerland has now agreed to cooperate with the EU (partly thanks to various scandals involving smuggling diamonds in toothpaste, corrupt principality banks, and common-or-garden tax evasion [PDF link]) in reform of its corporate tax system, which is currently home to thousands of Briefkastenfirmen (letterbox firms) who legally reside in Switzerland for tax purposes.

It also currently implementing the final parts of the Schengen open-borders agreement: something quite important given that it is, save from Leichtenstein, geographically surrounded on all sides by the Schengen zone. And out of character too: Switzerland is the first non-EU state to join Schengen.

The 8th February referendum is particularly interesting because of the unity that the EU is showing against the position of some parts of the Swiss government. It was brought about by the youth wing of the SVP, (the Swiss People’s Party yes, that SVP), somewhat against the relatively better judgement of older members. And its purpose is very clearly to deny to Bulgarians and Romanians the same freedoms that Switzerland grants to members of the EU-25, including Schengen open borders.

The Commission has so far held relatively firm against the idea that Switzerland should be allowed to discriminate, knowing that Berne has a lot more to lose in the cessation of freedom of movement than the EU has to lose from Switzerland’s digging itself into a hole. This is one EU dispute where the intransigence isn’t caused by internal disagreements. The Commission has indicated that should the Swiss referendum return a ‘no’, Switzerland would be thrown out of Schengen.

Switzerland is highly dependent on EU markets and labour. Out of a population of just under seven million, a full million live in Switzerland under freedom of movement agreements – originally conducted under a combination of various bilateral agreements and EFTA, and from 2007 onwards with the EU itself under the freedom of movement treaty.

So everybody with any sense knows that ending the freedom of movement agreement is a non-option. The economy wouldn’t quite implode, but a situation in which about a quarter of your labour force is suddenly placed into legal limbo, and nobody knows what the hell is supposed to happen when crossing the border, cannot be good. At the same time, few expect voters to actually cease the agreement. The referendum is seen, presumably, by its proponents as a bargaining chip aimed at re-negotiation.

The trouble is, Switzerland is in a very poor bargaining position. The agreement is already in place, for one thing. For another, it isn’t a member state, and Bulgaria and Romania are.  It seems that the two eastern states enjoy so much support on this issue that they haven’t had to kick up a stink about it yet, but they can and will if things look dire by late January.

And therein lies the problem: the vote could go either way. All the sensible parties are reminding Swiss people off all the Siemens and Alstom trains, BMW and Opel cars, IKEA kitchens and fine French wines that roll across the border into Switzerland every year, and of the world’s largest consumer market, to which Swiss firms get nearly unrestricted access. The SVP are currently too busy associating with Holocaust deniers to show a coherent front. Their website says they’re “against the expansion of the freedom of movement agreement“, which is a nice euphemism for “we want to re-write something we agreed to a few years ago to allow us to discriminate”. I wonder if their hearts are really in it. But then I remember what they can do, and what support they have. And that’s a bit scary.

The results for the canton of Zürich will be posted here. I wait with bated breath, and the slight sense of satisfaction that my own state is not the only complete crackpot when it comes to European integration