The referendum passed with 50.3 percent of the vote despite warnings by the government, economic federations and labor unions that approval would harm Switzerland's relations with the European Union and jeopardize economic stability. The Swiss are concerned that high immigration is putting pressure on real estate and labor markets, straining transportation infrastructure and raising the crime rate.
EU officials have noted that the result violates the principle of free movement of people and said they will review the bloc's relationship with Switzerland. German Finance Minister Wolfgang Schaeuble warned that Switzerland will encounter a number of problems because of its decision since the referendum cannot be translated into Swiss law without revising current agreements with the European Union.
The referendum does not specify what the annual quota for immigrants should be, and since Bern has three years to implement the decision there will be no immediate effects. Switzerland's goal will be to renegotiate the agreement on labor mobility without annulling other bilateral agreements that are important for Switzerland's economic integration with Europe. Brussels is unlikely to be receptive to Switzerland's request.
On the one hand, Brussels cannot risk alienating Bern because it profits from strong economic ties and transit through Switzerland. On the other hand, the European Union needs to make the consequences of implementing a quota system in Switzerland as evident as possible by putting the status of the bilateral agreements in question. This will likely trigger additional referendums in Switzerland regarding the relationship with the European Union and could lead to the reversal of previous decisions out of fear of being isolated from the bloc.
Countries across Europe closely followed the Swiss referendum not only because of potential complications in Swiss-EU relations but also due to the potential for approval to set an example for other member states. The recent elimination of migration restrictions for Romanians and Bulgarians as well as the high number of immigrants moving from struggling countries toward Northern Europe has fueled debate in countries less affected by Europe's economic crisis.
How much and what kind of pressure Bern will face from Brussels will heavily depend on the evolution of the integration vs. sovereignty debate among EU members themselves. Nationalist and Euroskeptical forces, which have been gaining popularity across Europe because of the lingering European crisis, will use Switzerland's position as an argument for the renegotiation of their own ties to the European Union and to reduce immigration. France's National Front, Britain's U.K. Independence Party and Italy's Northern League were quick to praise Switzerland's referendum, while the Alternative for Germany party called for a domestic debate on immigration and integration policy.
The growing popularity of Euroskeptical parties is also forcing mainstream parties to reconsider their positions on integration. This effect is most apparent in the United Kingdom, where British Prime Minister David Cameron, amid growing pressure from conservative factions, has promised to renegotiate Britain's relationship with the European Union in order to repatriate decision-making on certain issues. London is interested in renegotiating its links with the European Union, keeping some elements, such as the free trade agreement, while scrapping others, such as social legislation and potentially immigration. In the Netherlands, the government has said times of ever-deeper integration are over and that the boundaries on Brussels' power should be made clearer. In Germany, which has so far weathered the crisis well, there are growing concerns that the past years of bailouts and closer supervision of economic policy have taken place without sufficiently consulting voters.
Governments across the European Union face the dilemma of addressing the call for greater democratic accountability while at the same time aiming to make decision-making in the bloc more efficient through closer integration and greater delegation of power to Brussels. The recent decision by economically stable Switzerland at the center of Europe and the impending difficult negotiations between Brussels and Bern are an indication of looming upheaval within the union.