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Blogs - The M&A Perspective

Swiss Popular Initiative "Against Mass Immigration" - What Are the Consequences?

15.05.2014 – On 9 February 2014, the Swiss voters narrowly approved the initiative "Against Mass Immigration" with 50.3% of the votes. The initiative aims to limit immigration through quotas. The acceptance of the initiative obliges the federal council (the Swiss government) to renegotiate the entire EU labor market agreements within three years; the current treaties stay in force in the meantime. As an immediate consequence, the federal council was no longer allowed to sign the already negotiated free movement accord with Croatia, which joined the EU in July 2013.

A few weeks after the vote, the further consequences are still unclear. Foreign investors and potential acquirers of Swiss businesses are particularly interested to know whether it is still possible to send foreign employees to Switzerland. The answer is yes. The initiative has no immediate legal consequences on the labor market, as the current treaties stay in force until the initiative's implementation (which may take up to three years). The mid- and long-term consequences are still unknown. It remains to be seen where the implementing legislation will come out. In that context, it is important to note that although in a democratic vote the majority decides, one of the very important principles of Switzerland's direct democracy is that strong minorities also need to be adequately considered in the political process, and 49.7% voted against the initiative. This could lead to the introduction of a quota system that effectively limits immigration (respecting the majority's will), but not unreasonably (respecting the will of the strong minority).