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Doing deals with EU is better than joining, Switzerland says

Signing agreements with the European Union piece by piece remains a better option for Switzerland than joining the bloc, the Swiss government concluded in a report out Friday.

Doing deals with EU is better than joining, Switzerland says
A Swiss flag floats in the southern Switzerland city of Bellinzona, on July 8, 2022. Photo: Fabrice COFFRINI/AFP

Thirty years ago, on December 6, 1992, Swiss voters rejected the prospect of joining the European Economic Area (EEA) — giving access to the European Union’s internal market.

Three decades on, Switzerland’s Federal Council government assessed the country’s current options with regards to the surrounding bloc, looking at access to the single market, opportunities for cooperation, and foreign policy.

It considered the merits of four options: a free trade relationship, a continuation of the current bilateral approach, EEA accession, and EU accession.

“The Federal Council concludes… that the bilateral approach remains the best solution for Switzerland,” the government said.

The European Union is Switzerland’s main trading partner, and the wealthy Alpine nation is the bloc’s fourth-largest trading partner.

Some 1.4 million EU citizens live in the landlocked country of 8.6 million people.

“Swiss interests begin in and with Europe,” the Federal Council said. “In the current global situation, characterised by multiple crises, secure and stable relations between Switzerland and the EU are becoming more important than ever. They guarantee prosperity and stability for both parties.”

But it said that EU membership would go beyond Switzerland’s economic needs, and that Bern’s full participation in European decision-making processes would barely compensate for the reduction in political room for manoeuvre.

Strained ties

Ties between Brussels and Bern have been strained since Switzerland suddenly decided in May 2021 to end years of discussion towards a broad cooperation agreement with the bloc.

EU-Swiss ties are currently governed by a patchwork of agreements, and for more than a decade discussions were ongoing towards an overarching accord that would have harmonised the legal framework governing the relationship.

But the years of talks on a framework agreement hit an impasse after the European Union refused to budge on Swiss demands to exclude key issues relating to state aid, wage protections and freedom of movement.

Since then, Switzerland has been trying to pick up the pieces and establish common ground with the European Union through so-called exploratory discussions.

The report notes that political talks with Brussels “have enabled the two sides to build trust”.

“Before Switzerland and the EU can start negotiations, they must find sufficient common ground. Accordingly, the exploratory talks are to be actively continued.”

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WORKING IN SWITZERLAND

Switzerland sees record high immigration from European countries

Switzerland has seen record immigration from European countries and a new report reveals a correlation with the country's low unemployment rate.

Switzerland sees record high immigration from European countries

Lots of data indicates that Switzerland needs foreign workers to fill job vacancies.

Now a report from the State Secretariat for Economic Affairs (SECO) confirms the importance that employees from the European Union and EFTA (Norway, Iceland, and Liechtenstein) have had for Switzerland’s labour market and economy in general. 

That is why “demand for foreign labour was strong in Switzerland in 2023,” SECO said in its annual report published on Monday, which assessed the impact that the Free Movement of Persons agreement (FMPA) has had on the country’s employment.

In 2023, 68,000 people from EU and EFTA countries came to work in Switzerland, according to SECO, driven by “employment growth that has significantly exceeded the EU average.”

Why does Switzerland need EU / EFTA workers?

Simply put, they are needed for the country’s economy to function optimally.

As SECO pointed out, while the number of pensioners is growing (due mostly to Switzerland’s exceptionally high life expectancy), “Swiss working-age population has experienced only slow growth over the past 20 years.”

“The country’s economic growth is not possible without immigration,” said Simon Wey, chief economist at the Swiss Employers’ Union. “We need foreign labour if we want to maintain our level of prosperity.”  

READ ALSO: How EU immigrant workers have become ‘essential’ for Switzerland 

In what sectors is the need for these workers the highest?

“A large number of people from the EU coming to work in Switzerland are highly qualified and are employed in demanding activities in high-growth branches of the service sector, such as the branch of special, scientific and technical activities, that of information and communication or the health sector;” SECO’s report said.

But the Swiss economy also recruits EU nationals as low-skilled labour, particularly in the hotel and catering industry, as well as construction and industry.

Why are only people from the EU / EFTA states recruited?

The reason is that, unlike nationals of third countries, people from the EU / EFTA have an almost unlimited access to the Swiss employment market, thanks precisely to the FMPA. 

Also, those coming from the neighbour countries (as most of Switzerland’s foreign labour force does), have the required language skills to easily integrate into the workforce in language-appropriate Swiss regions.
 

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