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  #21  
Old 25.07.2014, 11:36
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Re: EU rejects renegotiation of free movement

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I am getting a bit bored with the constant anti-EU rhetoric in Switzerland. If Switzerland believes that it is in their interest to step out of a deal they signed with the EU regarding free movement of people, they should just do that. But then they should live with the consequences instead of blaming the EU. It's not the EU that asked to change the terms and conditions.
This rhetoric is much more to do with Swiss politics than the Swiss - EU relationship.
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Old 25.07.2014, 11:40
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Re: EU rejects renegotiation of free movement

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I am getting a bit bored with the constant anti-EU rhetoric in Switzerland. If Switzerland believes that it is in their interest to step out of a deal they signed with the EU regarding free movement of people, they should just do that. But then they should live with the consequences instead of blaming the EU. It's not the EU that asked to change the terms and conditions.
What would those consequences be?

Even if all treaties and agreements were reset to zero, I have difficulty imagining a scenario where there wouldn't be some negotiation to get at least the important stuff regulated on a bilateral basis.
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Old 25.07.2014, 11:42
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Re: EU rejects renegotiation of free movement

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When I first came to Switzerland there wasn't yet Schengen and there weren't a whole load of other things but I don't recall life being much worse and I got my work permit all the same as did many others. If we are genuinely moving back to that situation, I don't see that being the end f the world.
The first time I came to Switzerland to work was in 2002 and while not part of Schengen were the bilaterals already in action. Switzerland will do fine without Schengen but there will be issues without agreements on movement between the EU and CH. Movement of people is a reality and you will need a way how to deal with it. Locking up the country is one way, but probably not the best one for the Swiss economy. I lived in CH with my non-EU wife when Schengen was introduced and it did make life much easier for us as well as a significant part of Switzerlands population. The part that cannot vote but does have an impact on the economy...
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Old 25.07.2014, 11:44
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Re: EU rejects renegotiation of free movement

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No personal diss, but if you can be bought so easily, then maybe democracy is not your thing
Facts are not democratic, they are just facts.
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Old 25.07.2014, 11:47
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Re: EU rejects renegotiation of free movement

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What would those consequences be?
There are 715.000 Swiss living abroad. 60% of those in the EU... without bilaterals would they be treated like any other non-EU foreigner in Europe - which would cause quite some issues for them I guess for their employment all the way to permit situation.
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Old 25.07.2014, 11:50
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Re: EU rejects renegotiation of free movement

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There are 715.000 Swiss living abroad. 60% of those in the EU... without bilaterals would they be treated like any other non-EU foreigner in Europe - which would cause quite some issues for them I guess for their employment all the way to permit situation.
It's already established that existing permit holders will not be affected by any changes to the bilaterals.
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Old 25.07.2014, 11:53
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Re: EU rejects renegotiation of free movement

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The first time I came to Switzerland to work was in 2002 and while not part of Schengen were the bilaterals already in action. Switzerland will do fine without Schengen but there will be issues without agreements on movement between the EU and CH. Movement of people is a reality and you will need a way how to deal with it. Locking up the country is one way, but probably not the best one for the Swiss economy. I lived in CH with my non-EU wife when Schengen was introduced and it did make life much easier for us as well as a significant part of Switzerlands population. The part that cannot vote but does have an impact on the economy...
I am not on favour of locking borders. I just think some of the doom and gloom scenarios that say this is all bad for Switzerland that are being bounced around are unnecessarily pessimistic.

The EU of today has gone through some pretty tough stress tests. For example the euro crisis that basically ended up with the German taxpayer bailing out the Mediterranean countries. The German taxpayer grumbled quite a bit about that but ended up re-electing Merkel anyway. But many of the structural underlying problems that led to this crisis were not addressed and so sooner or later, it's going to come back. Germany today even has the unthinkable, the AfD is essentially a UKIP clone so whereas the Germans like to think the Brits are backward for not liking the EU and distrusting big government, they may well be heading down the same road themselves. I wouldn't like to be giving out wagers that in 20 years time there will still be a strong EU in its present form. And if Switzerland doesn't want to jump onto that party wagon, I don't blame them.
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Old 25.07.2014, 11:56
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Re: EU rejects renegotiation of free movement

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Facts are not democratic, they are just facts.
In politics there are few hard facts but lots of perspectives and points of view. You can find a good and a bad to almost everything.
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Old 25.07.2014, 12:00
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Re: EU rejects renegotiation of free movement

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What would those consequences be?

Even if all treaties and agreements were reset to zero, I have difficulty imagining a scenario where there wouldn't be some negotiation to get at least the important stuff regulated on a bilateral basis.
Losing the free trade agreements would be extremely high on the list.

For those of us in manufacturing in Switzerland, we live and die on exporting goods - the swiss market is just too small. 85% of what we do is exported to the EU. Since the majority of our costs are in Swiss Francs (mostly payroll) and the majority of our sales are in Euros, the strengthening of the Swiss Franc has taken our revenues down 20% on the same volume of product sold since 2009. The very likely death of the Swiss manufacturing sector in 2011 is what prompted the SNB intervention of the currency ceiling.

So, if EU countries now start applying punitive tariffs because of the free trade agreement going with the free movement agreement, you will start to see Swiss jobs going away. It is already hard enough to compete with other first world countries whose labour cost is half of ours (let alone people like China, that are a factor of 15 cheaper).

I suppose the good news is that if you damage the Swiss economy, that will devalue the Swiss Franc and help undo that damage...

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Old 25.07.2014, 12:07
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Re: EU rejects renegotiation of free movement

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What would those consequences be?

Even if all treaties and agreements were reset to zero, I have difficulty imagining a scenario where there wouldn't be some negotiation to get at least the important stuff regulated on a bilateral basis.
A negotiation implies two sides. The one with the big market is the EU. The one that does not want to kill its competitiveness is Switzerland.

Whatever is negotiated, the vote of the 9th of February will not have much of an effect and the final result will be worse conditions for Switzerland.

Geography, being a very factual science, also does not care about democracy. Switzerland happens to be in the middle of the EU.

Maybe taking a leading role in the EU could be more intelligent than not collaborating with someone that surrounds you.

A bit of Machiavelli/Buckhalter would not do too bad here.
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Old 25.07.2014, 12:12
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Re: EU rejects renegotiation of free movement

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Losing the free trade agreements would be extremely high on the list.

For those of us in manufacturing in Switzerland, we live and die on exporting goods - the swiss market is just too small. 85% of what we do is exported to the EU. Since the majority of our costs are in Swiss Francs (mostly payroll) and the majority of our sales are in Euros, the strengthening of the Swiss Franc has taken our revenues down 20% on the same volume of product sold since 2009. The very likely death of the Swiss manufacturing sector in 2011 is what prompted the SNB intervention of the currency ceiling.

So, if EU countries now start applying punitive tariffs because of the free trade agreement going with the free movement agreement, you will start to see Swiss jobs going away. It is already hard enough to compete with other first world countries whose labour cost is half of ours (let alone people like China, that are a factor of 15 cheaper).

I suppose the good news is that if you damage the Swiss economy, that will devalue the Swiss Franc and help undo that damage...
I have difficulty imagining that the EU would impose punitive duties on Swiss exports for any meaningful length of time. Firstly, in a world where everybody is talking about globalization and dismantling such barriers, it's not politically opportune. Secondly, Switzerland has too many ways to retaliate. If Italian trade lost access to the Gotthard it would effectively lose access to the ports of Rotterdam and Hamburg. That would be bad for both Italy and Germany. Similarly, the Swiss power network has a vital interconnecting and regulating function for the entire European network. If Switzerland took down those links, the Germans would have to restart some of their nuclear plants and there would be a whole chain of unintended consequences. Merkel could forget all prospects of re election.

In my view, it's all one enormous bluff to scare Switzerland into submission. It won't happen.
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  #32  
Old 25.07.2014, 12:13
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Re: EU rejects renegotiation of free movement

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In politics there are few hard facts but lots of perspectives and points of view. You can find a good and a bad to almost everything.
Not if you play a game that you know being lost in advance, what was the rationality of that move, it objectively creates only problems.

Badly formulated, appealing to nationalistic sentiments, not presenting the consequences, putting the country in the place of an impossible negotiation for a matter of ego basically.
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Old 25.07.2014, 12:21
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Re: EU rejects renegotiation of free movement

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I have difficulty imagining that the EU would impose punitive duties on Swiss exports for any meaningful length of time. Firstly, in a world where everybody is talking about globalization and dismantling such barriers, it's not politically opportune. Secondly, Switzerland has too many ways to retaliate. If Italian trade lost access to the Gotthard it would effectively lose access to the ports of Rotterdam and Hamburg. That would be bad for both Italy and Germany. Similarly, the Swiss power network has a vital interconnecting and regulating function for the entire European network. If Switzerland took down those links, the Germans would have to restart some of their nuclear plants and there would be a whole chain of unintended consequences. Merkel could forget all prospects of re election.

In my view, it's all one enormous bluff to scare Switzerland into submission. It won't happen.
EU will not impose any duties but may limit access of Swiss banks and non Swiss companies based in CH to EU markets.

Stuff like closing the Gotthard is just nonsense. What if the EU blocked Swiss airspace?
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Old 25.07.2014, 12:23
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Re: EU rejects renegotiation of free movement

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I have difficulty imagining that the EU would impose punitive duties on Swiss exports for any meaningful length of time. Firstly, in a world where everybody is talking about globalization and dismantling such barriers, it's not politically opportune. Secondly, Switzerland has too many ways to retaliate. If Italian trade lost access to the Gotthard it would effectively lose access to the ports of Rotterdam and Hamburg. That would be bad for both Italy and Germany. Similarly, the Swiss power network has a vital interconnecting and regulating function for the entire European network. If Switzerland took down those links, the Germans would have to restart some of their nuclear plants and there would be a whole chain of unintended consequences. Merkel could forget all prospects of re election.

In my view, it's all one enormous bluff to scare Switzerland into submission. It won't happen.
You are speculating that Switzerland could retaliate to a serious wounding of its economy by further wounding its own economy to inconvenience the EU. This isn't compelling. As the person who has to prepare the risk analysis for the shareholders, and who now has to move an "existenzbedrohend" dot up the probability axis, I can tell you that the "EU is bluffing" argument doesn't get me anywhere. My usual argument is "The risk to the Swiss economy is too high, so the government has to find a compromise."

The simple size of the EU compared to the size of Switzerland should make quite clear who holds the economic cards. As Switzerland has no natural resources of note, and produces no bottelneck product that is not produced elsewhere, they just don't have a lot of leverage with the EU, and most of that little leverage they have hurts Switzerland more than the EU. This is especially significant as the free trade negotiations with the NAFTA zone are nearing completion.

The simple truth is that Switzerland needs Europe far more than the reverse.
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Old 25.07.2014, 12:26
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Re: EU rejects renegotiation of free movement

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The EU of today has gone through some pretty tough stress tests. For example the euro crisis that basically ended up with the German taxpayer bailing out the Mediterranean countries. The German taxpayer grumbled quite a bit about that but ended up re-electing Merkel anyway.
In the benefit of transparency, I think it is relevant to point out the end result was mostly that the German taxpayer's (public) money was finishing up as (private) money of mostly German banks, the same banks which lent money to the Mediterranean countries at rather high interest rates
(whereas said banks were getting the money at much lower interest rates).

Before lauding how altruistic the German government was in supporting the "bail outs" one should consider if the bail outs were to help the economies of the Mediterranean countries. And as the proof is in the pudding, you need only look at the effect the measures that were attached to the bail outs - those economies (particularly Greece) didn't recover from the injection of money, because the money was going in only to come right out again to the external creditors! It wasn't being invested to create jobs or improve the economy. On the other hand, the austerity measures (many of which were necessary in my opinion) negatively affected the economies, and there was even some polemic because the research supporting that austerity would help recover economies was actually flawed if not outright incorrect.

Of course nobody forced the government of those countries to take the loans in the first place, so there is of course responsibility for the situation and inevitably some consequences should fall on the countries, but that is a different story.

This is a bit off-topic here but anyway.
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  #36  
Old 25.07.2014, 12:36
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Re: EU rejects renegotiation of free movement

Switzerland (in GDP measures) is roughly 25 times smaller than the EU. So what do you think is more likely? Europeans missing the swiss products, or swiss companies missing the huge market?

If free trade goes, Switzerland will go down in a spiral in no time. There is a good chunk of the value created in this country in manufacturing, and there are a lot of suppliers and producers of consumers goods. Never mind that big companies that cannot recruit will simply move their business over the border.

I think a lot of Swiss people are a little too self absorbed, and honestly believe they are the center of the world. Don't get me wrong, Switzerland is an excellent place to be, but it is by far less important than the EU in every imaginable scale. I don't think EU has to bluff anything, since they are definitely holding the winning hand.

You say about access to the Gotthard and whatnot. Well, CH is not that big, and a lot of southern countries already skip it because it's already too expensive to cross the Alps through here. As it is, Switzerland is already a hurdle that logistics is trying to skip, so even if they literally shut down the border, it's not going to be an issue for transportation of goods.

The EU has a gazillion problems, and it is by far a perfect party, or a good party for that matter - especially the last couple of years. And just because everything was good 10 or 20 years ago, doesn't mean squat.

CH will not burn to the ground if it destroys its relations with the EU, that's obvious. And at some point life will be back to normal, albeit a little different. And that life would probably still be somewhat good.
The thing is that with bilaterals in place CH can be in a much better position and the people could have a much better life.

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Old 25.07.2014, 12:45
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Re: EU rejects renegotiation of free movement

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Switzerland (in GDP measures) is roughly 25 times smaller than the EU. So what do you think is more likely? Europeans missing the swiss products, or swiss companies missing the huge market?

If free trade goes, Switzerland will go down in a spiral in no time. There is a good chunk of the value created in this country in manufacturing, and there are a lot of suppliers and producers of consumers goods. Never mind that big companies that cannot recruit will simply move their business over the border.
And a good chunk of that 25x smaller GDP is coming from those multinationals / companies that certainly want to keep free trade and free movement for recruitment.
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Old 25.07.2014, 12:46
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Re: EU rejects renegotiation of free movement

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I have difficulty imagining that the EU would impose punitive duties on Swiss exports.
Indeed, but seen from the EU, the only thing that matters is procedure.

Short version: it is a technical no from Brussel. Procedure must be respected to change the ground on which EU had no choice but saying no and then EU can gain the freedom to give another answer.

Long version: EU is waiting for the Swiss to suggest how to deal with legally two contradicting referenda (I admit, the EU knows that there is no solution, so they just sit and wait). The EU doesn't care one bit what Swiss vote, they only care about signed treaties. The only treaties signed to this date are known to all, they are being applied and basta. Any change = new negotiation based on the proposal of the part demanding the change. No proposal = no negotiation = no change. Count on the Germans to make sure nobody forgets that in Brussel. Read the German media, you'll understand the scale of fedupness. (This is btw the reason why Germany buys tax fraud CDs: every single rule will apply on German/European territory the way it stands on paper and foreign discussions won't change that, hence Germany don't mind the Swiss discussing the legality of the CD buys as long as the CD is in Berlin.) Back to topic: The Swiss must understand that a signed paper is not valueless. Frankly, the parliament in Bern understands that very well - Somaruga/Burkhalter agree totally with the EU on an institutional & technical level - and this is also the reason why they have no idea what proposition to submit to the EU in order to clean up the mess that an internal political debate created outside of its political territory. The SVP/UDC wants the cancelation of agreements with EU starting with anything that gives the right to a foreigner to stay in the country even if s/he has employment and pays for all the bills. EU wouldn't mind, but it is not the way it is settled and regulated now by the legally binding rules in vigor per datum. Swiss government knows perfectly the procedures for changing this, this is why they are stuck. The SVP/UDC doesn't care about procedures, that's their opinion but that won't change the facts on said procedures. I don't like the procedure to get a day off at my work place, but I still have to respect it and not just walk off.
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Old 25.07.2014, 12:51
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Re: EU rejects renegotiation of free movement

If CH is concerned about too much immigration, then just stop offering tax breaks to foreign companies
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Old 25.07.2014, 12:54
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Re: EU rejects renegotiation of free movement

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EU will not impose any duties but may limit access of Swiss banks and non Swiss companies based in CH to EU markets.

Stuff like closing the Gotthard is just nonsense. What if the EU blocked Swiss airspace?
Of course it's nonsense. But so it is nonsense that Switzerland will suddenly find itself unable to export to the EU.
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