EU enlargement and Switzerland: the European Union's expansion has caused concern for Swiss jobs amongst the Swiss anti-European lobby. But leading economists say that this, in fact, should have little impact on the job market.

Author:O'Brien, Tom
Position:Money
 
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Next mouth will see the adhesion of Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia to the EU. But the European Union has accepted that Switzerland, like other member states of the EU, could delay measures to open its labour market to nationals of the 10 new EU member states.

The European Union had been asking Switzerland to open its borders to citizens of the new EU members from 2007. However, Swiss negotiators won concessions earlier in the year after some EU states said that they also wanted delays in freedom of movement for the new EU nationals.

Hanspeter Hausheer, senior economist at UBS, tells Swiss News that if the old EU15 countries and Switzerland open their labour markets for new members at the same time, there should be no danger of a flood of migrants.

"The same fears were expressed in Germany at the beginning of the 80s, when Spain and Portugal joined the EU," adds Hansheer. "Afterward, it became apparent that these fears were unfounded."

However, it could have been a problem had Switzerland been forced to open its labour markets immediately after these countries joined the EU, while the old EU15 countries continued to enjoy a transition period of several years.

The latest news from the negotiations between Switzerland and the EU for a new bilateral accord gives hope that such an effect can be avoided.

Economic Ties

Switzerland has always been closely linked economically to its EU neighbours, despite remaining outside of the EU fold. Financial analyst, Francois Savary, says that Switzerland is already largely dependent on Europe for its economic cycle.

"Switzerland is a very open economy, that means dependent on exports, with strong ties to the Euro area," explains Savary. "A European economic rebound or slump is therefore of significant importance for Swiss economic activity."

In fact, 60 per cent of Swiss exports go to the EU, while 80 per cent of our imports come from these countries. For the EU, Switzerland is the second most important trading partner after the US, with nearly 8 per cent of EU exports heading towards Switzerland.

These strong economic links between Switzerland and the EU result in a high correlation of the economic cycles. If the EU falls into a recession, Switzerland has no chance to escape and an economic recovery in Switzerland is not possible without an economic upturn in the EU.

The 10 countries, which will join the EU, are quite small. Although...

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