Switzerland pressured to admit foreign workers

GENEVA – The EU on Saturday pressured Switzerland ahead of a key meeting in Brussels, stressing that a no vote in a referendum on admitting workers from Romania and Bulgaria would undo a string of bilateral agreements.

Switzerland, which is not a member of the European Union, is due to vote in February on extending the EU’s free movement of labour policy to the two new bloc members.

But Michael Reiterer, EU ambassador to Switzerland, warned in an interview that a rejection of the policy would automatically see a raft of bilateral agreements scrapped through the so-called guillotine clause.

"There is no place for speculation or playing for time… In case of a no, the first parcel of bilaterals will be automatically cancelled," he said in the interview with the daily Geneva Tribune.

"The guillotine clause will be automatically applied, six months after Switzerland informs the EU of a popular no," he said.

The EU is Switzerland’s main economic partner and national leaders have pledged to do all they can to secure a yes vote.

Reiterer was speaking ahead of the meeting on Monday between European Commission chief Jose Manuel Barroso and Swiss President Pascal Couchepin, Finance Minister Hans-Rudolf Merz and Justice Minister Eveline Widmer-Schlumpf.

If the country votes no in February, the European Union has already warned that it could also jeopardise Switzerland’s admission to the border-free Schengen zone.

Membership of the zone allows for passport-free travel between 25 countries and Switzerland joined on Friday.

The second topic for discussion on Monday was expected to be the taxation of businesses with "foreign-based" firm status.

In line with EU demands, Finance Minister Merz on Wednesday announced a plan to scrap the status which offers tax benefits deemed unfair by Brussels.

Some 10,000 so-called foreign-based companies have no business activities in Switzerland but perform management functions there.

Under the reform they would lose their right to a preferential rate of tax.

Reiterer called the plan a move in the "right direction" but said it would not entirely resolve the issue.

[AFP / Expatica]