• Switzerland's news in English

Moody’s: Swiss migrant vote ‘credit negative’

Malcolm Curtis · 18 Feb 2014, 21:08

Published: 18 Feb 2014 21:08 GMT+01:00

Facebook Twitter Google+ reddit

Swiss voters on February 9th supported an initiative to reintroduce quotas on immigrants from the EU in a move that has already led to retaliation from the 28-country bloc.

“Limiting immigration is likely to affect the country's growth potential, wealth and overall economic strength,” Moody’s said, noting that the effect of the vote was “credit negative”.

The agency noted that Switzerland has benefited over the past decade from the “strong inflow of highly qualified workers”.

Moody's said it believes that this has “helped mitigate the adverse effects of population ageing and skilled labour shortages, thereby positively contributing to employment and economic growth.”

It said that immigration curbs would also have an adverse impact on the “asset quality” of Swiss banks and potentially on their capitalization.

The quotas “could reduce housing demand, thereby exerting pressure on residential house prices, and potentially leading to a faster-than-anticipated slowdown in residential housing markets,” Moody’s global credit research department said.

Story continues below…

“In addition, negative repercussions on Swiss-EU trade may put pressure on export-oriented businesses, thereby leading to weaker corporate asset quality.”

Moody’s added that the degree of impact of the immigration initiative would depend on how it is implemented over the next three years.

The actual level of quotas was not determined in the initiative and it will be up to the government to establish this.

So far the reaction of investors to the immigration vote has been muted.

The Swiss franc has actually strengthened against the euro (trading at 0.81837 cents late Tuesday) since the referendum results were announced and UBS is predicting strong economic growth for the country of 2.1 percent for this year.

Switzerland’s key SMI stock index, meanwhile, has risen since the vote.

The federal government has emphasized that the freedom of movement agreement with the EU remains in effect until a new system is put in place.

But the EU has responded by freezing research grants to Swiss universities and funding for the Erasmus student exchange program.

It has also suspended talks on electricity exports.

Moody’s warned that “if there are strictly binding limitations on (Swiss) immigration that dismiss existing bilateral agreements, current trade facilitations between Switzerland and the EU could be partially withdrawn".


Malcolm Curtis (news@thelocal.ch)

Facebook Twitter Google+ reddit

Your comments about this article

Today's headlines
'Protect Swiss waterways or lose our fish': WWF
Photo: Richi Stadelmann/WWF

Eighty-five percent of fish species in Switzerland are under threat, according to a report by the World Wildlife Fund (WWF).

SBB pilots new annual pass – costing 12,200 francs
The 'door-to-door' pass includes use of an electric car. Photo: SBB

Swiss federal railways (SBB) is looking for 100 people willing to pilot a new annual transport pass that includes use of an electric car.

Immigration to Switzerland falls as emigration rises
File photo: The Local

Immigration in Switzerland has fallen considerably this year, according to official figures.

Wawrinka aces his way into Basel quarterfinals
Photo: Fabrice Coffrini/AFP

The home favourite returns to the quarterfinals of the Swiss Indoors for the first time in five years.

Illegal immigrant dies after setting himself on fire
The victim was treated at University Hospital Zurich. Photo: University Hospital Zurich

The 45-year-old Tunisian was threatened with deportation.

Swiss government rejects call for second immigration vote
Photo: Justus Blumer/Christophe G

The Swiss government has rejected a popular initiative calling for a revote on plans to limit immigration.

Bern: companies should report salary inequality by law
File photo: Fabrice Coffrini/AFP

The Swiss government wants to force small companies to examine their rates of pay every four years.

Husband in custody after Orbe body identified
File photo: Bas Leenders

The deceased is a 55-year-old woman who lived in the house with her husband.

Presented by MoneyPark
How to get a mortgage in Switzerland
Houses in Zürich. Photo: Pixabay.

Ready to buy? Here’s what you need to know as an expat about Swiss regulations, how to finance your purchase, and why you should use a broker.

Autumn in Switzerland: ten stunning Instagram photos
Photo: Swiss Tourism/Jan Geerk

Switzerland is beautiful in all seasons, but as these photos show, autumn is a special time in the alpine country.

Photo: Unterirdisch Ueberleben
Inside Switzerland’s largest nuclear bunker – 40 years on
Sponsored Article
Last chance to vote absentee in the US elections
Photo: The Local
Ticino firefighters rescue cow from swimming pool
Photo: Antoni Da Campo
Vegan wins battle to be accepted by Swiss army
Photo: Swiss Tourism
Ten Swiss ski resorts named most expensive in Europe
Photo: Randy Kashka
Swiss women will ‘work for free’ for the rest of year
Photo: Swiss Tourism
Montreux throws hat in Olympic rings
Photo: Swiss Tourism
Seven things you’ll miss about Switzerland if you leave
Photo: Richard Juilliard/AFP
Man makes Geneva airport bomb threat ‘for a joke’
Photo: AFP
Solar Impulse team reveals plans for unmanned plane
File photo: Martin Abegglen
Swiss to vote on passport rules for 3rd gen foreigners
Photo: AFP
Swiss wingsuit hotspot Lauterbrunnen won’t impose ban
Photo: Swiss Tourism
Six reasons Switzerland isn’t as boring as you might think
Photo: Swiss Tourism
Report: Switzerland one of world’s best places for girls
Photo: The Local
Thief returns Swiss cow bells worth thousands
File photo: Wikimedia Commons
One in three rapists isn’t locked up: statistics
Photo: activistin.ch
Tampon-tax protest turns Zurich fountains red
Photo: AFP
Geneva police to lift ban on bearded officers
Photo: Marcel Gillieron/AFP
Suicide chef’s restaurant keeps Michelin stars
Photo: Lara de Salis
11 things the Swiss get tired of hearing abroad
Photo:  Ivo Scholz/Swiss-image.ch
Survey: expats in Switzerland have money but few friends
Photo: AFP
Swiss press criticize Bern’s 'capitulation' on immigration
Photo: Jura Trois Lacs tourism
German ex-policeman is Swiss city’s new hermit
Photo: Dmitry A. Mottl
Ticino votes to favour local workers over foreigners
jobs available