Immigration to Switzerland, which remains high, is a matter of concern for the population. More than two-thirds of immigrants come from the EU. As a result, Switzerland has pushed for protective measures during bilateral negotiations. The deal struck with the EU allows Switzerland to temporarily limit immigration in the event of serious economic problems. It is now up to the Federal Council to implement the safeguard clause.
The organization of the safeguard clause will not only be crucial for the acceptance of the bilateral agreements but is also likely to influence the referendum campaign on the Swiss People’s Party initiative aiming to limit the population of Switzerland to 10 million. It is hoped that a reliable safeguard against uncontrolled immigration could take the wind out of the initiative’s sails.
Despite the importance given to the safeguard clause, its effectiveness remains questionable. This is partly due to the narrow framework defining when the safeguard clause can be triggered. Additionally, even with a well-defined safeguard clause, it is not an optimal tool for managing immigration. If it is regularly activated, a race would emerge among businesses and potential immigrants to immigrate as early as possible before the safeguard clause takes effect.
If the measures are slow to come into force, they could already be outdated. If they prove truly effective, catch-up effects are likely to follow. The result would be a constant cycle between years of above-average immigration and restricted immigration. This “stop-and-go” approach is unlikely to significantly reduce immigration but, depending on its design, could create planning uncertainty for businesses.
In contrast, continuous management of immigration, such as through an immigrant fee, would cause less disruption. However, such a permanent restraint is incompatible with the bilateral agreements.
Which leaves us with the safeguard clause. At least the agreement with the EU allows Switzerland to regulate the details independently within the Foreign Nationals Act. This flexibility should be used wisely to minimize the negative side effects of the safeguard clause. In practice, what should be considered?
Incentive Fees Instead of Quotas
Immigration has not caused direct economic problems in Switzerland so far, such as unemployment. The real challenges arise from so-called “saturation effects” — for example, the excessive use of natural resources or existing infrastructure due to rapid population growth.
The criteria for activating the safeguard clause should therefore focus on sustainable population growth. Key factors include net immigration and domestic demographic trends. Migration movements in other parts of Europe, however, should not be considered relevant.
If the safeguard clause is activated, it should focus on low-bureaucracy incentive fees, such as an immigrant fee or, in some cases, the companies employing them.
On the other hand, it is preferable to avoid maximum limits and quotas. A quantitative restriction is prone to lobbying, creates a significant administrative burden, and introduces planning risks, especially for SMEs and startups. Switzerland has experienced this in the past and should not repeat it.
However, one should not be under any illusions. If the safeguard clause is not merely a political appeasement, its activation will inevitably lead to conflicts with the EU. Switzerland will rarely be able to justify serious economic problems.
If Switzerland does engage in a confrontation, it benefits from the fact that the negotiated agreement includes clear rules for how to proceed and any potential compensatory measures. This is a significant improvement over the current status quo.
In the event of a political dispute, the safeguard clause should achieve its intended effect at best. Otherwise, the simple free movement of persons with the EU remains the more stable and economically advantageous system.
This article was published in the newspapers of CH-Media on January 30, 2025.
