Brexit: a stress test for the ‘Swiss way’

Look hard enough for things that Switzerland and Britain have in common and you’ll eventually find something – even if it’s Winston Churchill or the first conquerors of our mountains.

This content was published on June 22, 2016 - 17:00
Simon Gemperli, Neue Zürcher Zeitung, Neue Zürcher Zeitung

By and large, however, Brits and Swiss, despite their “splendid isolation”, are rather different. That said, there is one thing that unites the two nations: a deep scepticism of Europe’s head office in Brussels.

According to the latest poll from the Federal Institute of Technology in Zurich (ETHZ), 16% of Swiss still support Switzerland joining the European Union. This is the lowest level since records began two decades ago.

Now you could be forgiven for assuming that the Swiss are in a state of feverish excitement about Thursday’s referendum and are hoping fervently that the Brits opt for life outside the EU. But Brexit euphoria is by no means the case. Even those political parties and organisation which would like to scale back Switzerland’s integration in Europe are relatively indifferent to Britain potentially going it alone.

In the Swiss parliament two motions have recently been filed about Brexit – and 67 on shooting wolves. Almost the only Swiss to welcome secession by London are those who want total detachment from the EU Single Market. They believe, like Nigel Farage, the head of the anti-EU UK Independence Party, that they would be able to reach a comprehensive free trade agreement with the EU that would protect the interests of companies and citizens just as well as the Single Market.

In return, Brits are struggling to get that excited about the “Swiss way”. While the bilateral route is generally popular in Switzerland (if only there weren’t the problem of free movement of people…), sympathy in Britain for this integration model has dwindled during the referendum campaign. On closer inspection, the negotiation of 120 agreements, the lack of co-determination rights and the obligation to adopt legislation doesn’t seem the right path for the erstwhile most powerful nation in the world. The Brits are also aware of Brussel’s harsh reaction to Switzerland’s attempt to annul the free movement of people unilaterally via a nationwide vote.

Even Farage is no longer a fan of the Swiss way. Two years ago in Winterthur, as a guest speaker of the conservative Campaign for an Independent and Neutral Switzerland group, he extolled the Swiss integration model as a beacon for Europe.

Today, however, Farage stresses whenever he gets the chance that Britain must take a different route from Switzerland – and the other EFTA countries Norway, Liechtenstein and Iceland. Brexit hardliners would choose economic disintegration over relinquishing sovereignty – which is part of the deal of getting access to the Single Market.

Theory and practice

Theoretically, a post-Brexit alternative exists which would be acceptable from both a Swiss and British point of view: the further development of the European Economic Area (EEA) with joint decision-making power for those EFTA states in areas where they are obliged to adopt the “acquis communautaire”, the body of EU law. This would be a third group of European countries, in addition to those in the eurozone and those outside it.

Foreign policy and security policy could be organised in parallel with another political configuration. But for this to happen, the European Union would have to undo part of its own history to some extent and return to the historic decision of 1990, when it refused to give EFTA states joint decision-making power in the EEA. Such a scenario would be conceivable only if all the EU’s hopes are dashed and a breakaway movement led by Britain gets going.

This could certainly be an option for Switzerland, which hasn’t been spared having to weigh up new participation possibilities and giving up (bogus) sovereignty.

Opinion series publishes op-ed articles by contributors writing on a wide range of topics – Swiss issues or those that impact Switzerland. The selection of articles presents a diversity of opinions designed to enrich the debate on the issues discussed.

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So much for the theory. In practice, following Brexit Switzerland would immediately find itself in an unpleasant situation. One can imagine the following stages: it all begins with a brutal currency shock, without speculating on further economic consequences; the EU cancels talks on a safeguard clause on immigration; the conclusion of an institutional framework agreement – the condition for new bilateral treaties – recedes into the distance.

Both issues will remain in the centre of negotiations on Britain leaving the EU: how does a third state that doesn’t want to be in either the EU or the EEA attach itself to the EU and its Single Market?

Switzerland’s timetable, which stipulates that quotas for EU and EFTA citizens will come into force at midnight on February 9, 2017, is a priority neither in the British Isles nor on the Continent. A pragmatic solution could begin by agreeing, by the end of the year, a packet of reforms with internal supporting measures. The legal conflict between the constitution and the free movement agreement could be temporarily resolved by an order or federal decree; in the long term, however, only by a change in the constitution.

The stupidest possible reaction would be terminating the free movement agreement in the middle of the post-Brexit confusion, thereby risking the bilateral treaties.

The pressure remains

If the Brits remain in the European Union, implementing the Brexit deal will take a lot of time. The basic agreement negotiated by British Prime Minister David Cameron doesn’t leave much room for directly limiting immigration, more though for indirect or autonomous measures – from curbing social benefits to the integration of refugees.

At the same time, negotiators are put in an impossible situation by deadlines enshrined in the constitution: they are expected to be able to come up with a result by July, so that parliament can agree a bill by the end of the year.

Diplomacy is facing a simply impossible task. The constitution’s article on immigration contradicts the free movement of people, which, from Brussels’ point of view, is not up for discussion.

If the bilateral path is to be pursued, two options remain in the second half of the year: changing the constitution or interpreting it very generously. In both cases the target of better control of immigration with a combination of autonomous accompanying measures and measures agreed with the EU will be taken into account.

Before committing to a nationwide vote (which would need a cantonal majority) or implementation at a statutory level, the Swiss are going to have to wait for the upcoming negotiations with the EU. The greater the substance, the greater the chances of a flexible interpretation of the immigration article in the constitution. Conversely, it would be foolish to avoid a change in the constitution for fear of voters. Direct democracy just doesn’t work like that.

The Brexit referendum is a chance for Switzerland to break away from its rigid fixation on self-inflicted legal conflicts and to concentrate, like the Britons, on the fundamental question: which integration model works best for Switzerland? Vague and contradictory constitutional articles cannot be the sole point of reference. Negotiation objectives must be compared on a regular basis with reality on the Continent. The next appointment is Thursday.

Whatever the Brits decide, the “Swiss way” remains under pressure.

This text was published in the © NZZ newspaper on June 13, 2016.

The views expressed in this article are solely those of the author, and do not necessarily reflect the views of

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