How Will End of EU-Switzerland Negotiations Affect Cross-Border Workers?

Called Off Negotiations

              Switzerland is not a member of the European Union, but has close ties with the bloc, which has been regulated over years by more than 120 bilateral deals. Seven years ago, the country started negotiations with the EU to replace these deals with one treaty on all bilateral relations. Negotiations ended, but Switzerland still has some issues to discuss before signing the deal. As it couldn’t find common ground with Brussels, on May 26th it announced that its quitting talks. This move has jeopardized bilateral relations, though it is not clear yet what repercussion it can have on Swiss economy, export, cooperation on research, education or trade with the EU, and in result also on Swiss franc exchange rate. Some old bilateral deals will lapse soon – in fact one, on medical trade, just has lapsed, causing Swiss medical companies to be treated as a third country exporter. More troubles surely will follow. What about free movement of people and cross-border workers?

Cross-border Workers

              Cross-border workers and foreign employees are essential for Swiss economy. As per estimation around 1.4 million citizens of the EU live and work in Switzerland and 340,000 cross-border workers are employed in border cantons. The most significant numbers of cross-border employees work in Geneva canton – more than 120,000 coming from neighboring France, with 60 percent of all employees at Geneve University Hospitals being French citizens. In Basel-City canton there are around 70,000 employees from France and Germany, whereas to Ticino commute 67,000 workers from Italy. Lack of one bilateral deal between EU and Switzerland might affect Swiss labour market. For Switzerland cross-border workers are very important, which was proved during the pandemic when they were one of few groups of people allowed to enter Switzerland during closure of borders. EU citizens can work in Switzerland based on the Free Movement of Persons Agreement, one of 120 deals between the EU and Switzerland. This agreement was in the center of discussion between two sides, as divergent interpretations of the deal was an obstacle. As the Swiss Foreign Minister Ingazio Casis stated back then when talks still took place: “For Switzerland, it is essentially about the free movement of employees and their families. For the EU it is about the free movement of all citizens of the European Union”.

Problematic Situation

              No wonder that now governing bodies of cantons fear abrupt end of talks can have negative influence on ability to employee foreign residents, holders of G-permit – cross-border workers. As of now there are no repercussions, but it might change in long-term. District presidents of Basel-City, Geneva or Ticino all agree the situation is problematic, and this is low point for Swiss foreign policy, also adding that there might be issues with cross-border transport projects, for instance. Without being sure such transborder initiatives are financed, it will be difficult to implement them. There might be also observed migrating of business to nearby regions across the border, where less bureaucracy might be related to hiring people.