Swiss voters will soon have the chance to have their say in a referendum on the Civil Service Act, asking whether the number of people leaving the military for civil service should be reduced, as well as on a far-right initiative to limit the population to 10 million, to be called the “No 10 Million” initiative.
At the heart of the populist initiative to be voted on on June 14 is the question of how many people should stay in Switzerland. The far-right Swiss People’s Party (SVP), which proposed it, wants to ensure that the permanent population does not exceed 10 million after 2050.
A similar initiative by SVP had failed 12 years ago.
economic interests at stake
The issue is not just of nationalism, psychology and xenophobia but also of economic interests.
From an economic perspective, the matter is far from simple, said Tobias Hedland of the Kiel Institute for the World Economy (IFW). He told DW that if voters decided to limit immigration it would “create a conflict over what kind of immigration should still be allowed”. He predicted that there would be widespread discontent in the business community as well as in wider society, as “many highly qualified people will decide against immigrating to Switzerland, which will likely be seen as ‘keeping out the wrong people’.”
Sabine Zinn of the Berlin-based German Institute for Economic Research (DIW) told DW that the question of whether immigration restrictions make sense “cannot be answered with a simple yes or no.” The real challenge, he said, is to distinguish between “refugee migration on humanitarian grounds and labor migration on the basis of economic necessity”.
For Zinn, there are many economic reasons against imposing general limits on immigration: “Many European countries, including Germany and Switzerland, face significant demographic challenges,” he said, noting that there were increasingly fewer people in the workforce that were responsible for funding social security systems. He said there is already a shortage of qualified applicants in the labor market. “A complete ban on immigration is likely to exacerbate these problems.”
Wido Geiss-Thon, an expert on migration at the German Economic Institute (IW) in Cologne, said that although the shortage of skilled workers would be a concern, the problem may lie more with “unskilled labour”. He pointed out that many EU citizens work in hotels, restaurants and construction sectors and if they would no longer be able to enter the country, it could cause problems. They are “important for Switzerland,” he said, pointing out that the country is, “after all, a tourist destination.”
“The $10 million limit will certainly cause significant harm,” he said.
Can other countries like Germany follow suit?
Financial news outlet Bloomberg said that for the SVP, the referendum is “a milestone in two long-term priorities: limiting ties with the EU and tightening immigration controls.”
In a report, Bloomberg cited Swiss think tank Demographics, which has calculated that if the SVP’s proposals are adopted, economic output could be reduced by up to 12% by the end of the century. The healthcare sector, hospitality industry, IT sector and construction industry will be particularly affected by the labor shortage. It said the central question now is whether Swiss voters will be swayed by the risks of long-term economic consequences.
If Swiss voters approve the SVP initiative, could other countries like Germany follow suit? Geiss-Thon told DW that he sees no risk of that happening, “because the political processes in Germany and Switzerland are quite different.” He said that the importance of Switzerland in Europe cannot be compared with Germany. “As an EU member state, Germany cannot restrict the free movement of people (without leaving the EU), even if it wanted to, it cannot follow in Switzerland’s footsteps.”
Heidland was less convinced and saw a definite risk: “Germany is already looking towards its more restrictive neighbors like Denmark. This was evident in the debate about people migrating to access social welfare, he said, as well as on the question of whether Ukrainian refugees should receive a basic income.”
Zinn said he feared the referendum could act as a “signal beyond national boundaries”. He said the results would be closely watched, “especially in European countries with far-right and centre-right governments,” adding that they could be interpreted as evidence that “demands for tighter immigration controls can potentially garner majority support.”
Good for Germany, disastrous for Switzerland
Geiss-Thone said the SVP initiative could also work in Germany’s favor if it is approved: “Depending on how the proposal is implemented, Germany could potentially benefit significantly. If it becomes significantly more difficult for German skilled workers to immigrate to Switzerland, many of them will likely stay here and help stabilize the local workforce.”
But it could be devastating for Switzerland, especially if it breaks ties with the EU, its biggest export market. Switzerland currently benefits from the principle of free movement in the EU, which gives Swiss companies access to a market worth $23 trillion (€20 trillion) with approximately 450 million consumers.
This article was translated from German.