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IMMIGRATION

EXPLAINED: Switzerland’s referendum to restrict EU migration

On September 27th, Switzerland will go to the polls to vote on an initiative to restrict migration from EU states.

EXPLAINED: Switzerland's referendum to restrict EU migration
A Swiss People’s Party (SVP) poster showing a cartoon worker wearing a belt studded with EU stars, crushing the red and white map of Switzerland with his wide rear end that translates from German as "

The centrepiece of the September referenda is the right-wing Swiss People’s Party initiative (SVP) on implementing a cap on EU migration. 

The ‘moderate immigration limitation initiative’ will restrict EU freedom of movement in Switzerland. 

EXPLAINED: What is Switzerland's referendum on restricting migration all about?

If the vote is successful, Switzerland and the EU will have one year in which to renegotiate freedom of movement provisions. 

This has long been one of the SVP’s core issues – particularly since a similar proposal was defeated at a referendum in 2014 – with supporters believing too many foreigners are taking advantage of the current system. 

The SVP argue that the current migration system places too much stress on the labour market, social services and infrastructure. 

“We must first secure jobs for ourselves as citizens,” the SVP writes

An estimated one quarter of Swiss residents are foreigners – which rises to as high as 50 percent in cities such as Zurich – many of whom do not have citizenship and therefore the right to vote. 

READ MORE: ‘I pay taxes but have no say in Swiss life': Your views on whether Switzerland should allow all foreigners to vote 

The Swiss government and all major parties besides the SVP reject the initiative. 

Regardless of the outcome, experts have also predicted that Swiss-EU relations could be significantly impacted.

The government is concerned it will make it harder to find workers and damage the economy, while there are also concerns that it will mean reciprocal rights for Swiss citizens in the EU will be restricted. 

How will the referendum change migration? Photo: Stefan WERMUTH / AFP

'Ruin the economy'

The Swiss Federal Council said that the initiative would end free movement and threaten the country’s economic prosperity. 

The Council said the cost could be between 460 to 630 billion over the next 20 years. 

The initiative seeks to curb EU migration into Switzerland. Under the initiative, Switzerland would set its own migration quotas. 

Currently, while Switzerland is not a member of the EU, EU citizens are free to live and work in Switzerland and vice versa. 

While comparisons have been made between the initiative and the United Kingdom’s Brexit referendum, one major difference between the two is that the EU has no obligation to negotiate a deal with Switzerland should the existing freedom of movement rights be terminated. 

Karin Keller-Sutter, a member of the seven-person executive which acts as Switzerland’s head of state, said supporters were gambling with Switzerland’s future. 

“It’s a poker game and a leap into the unknown. It’s irresponsible,” she said. 

“We don’t have a plan B.”

She also warned that a range of other arrangements which impact trade and commerce would be put at risk. The EU is Switzerland’s major trading partner, with exports to the bloc making up more than half of Switzerland’s total. 

If the initiative is approved, Bern and Brussels would have one year to hammer out a new migration deal. While the SVP is staunchly in favour of the proposal, the remainder of the larger Swiss political parties are against it. 

A sign in French says “voting today” in Switzerland. Photo: FABRICE COFFRINI / AFP

How likely is it that the referendum will pass? 

In early 2020, most experts felt that the referendum would fail – just as similar efforts have failed in the past. 

However, as reported by The Local Switzerland in May, the pandemic led to an increase in Swiss nationalist sentiment, with even centre-left parties supporting policies under a 'Switzerland First' mantra. 

Although such calls are relatively common place among members of the right-wing populist Swiss People’s Party, they have gained traction among the centre and centre-left parties on the Swiss political landscape. 

The centre-left Social Democrats – normally advocates of further European integration – have laid out a ‘Switzerland first’ investment program to encourage the country to learn the lessons of the coronavirus. 

The investment program says it aims to ‘break the taboo’ surrounding the nationalisation of production, particularly with regard to items of strategic importance. 

Michael Siegenthaler, a Labour market specialist at KOF Swiss Economic Institute in Zurich, told The Local that the rise in nationalist sentiment could see the referendum pass. 

“This is going to be a big debate now in the upcoming vote. Who is going to win?”

“It is obvious, again, that cross-border workers are important for the Swiss labour market – for instance for the health sector they are extremely important – but we are not sure whether this narrative is going to win. 

“I don't have an answer, but I do know that there are people who are up high in the government who are afraid (that the referendum will pass). 

“Before covid they were relatively sure that the initiative didn't have a chance. But now, especially if people have lost their jobs, they will find a scapegoat for their personal situation – and it will be cross-border workers or immigrants in general who will be the scape goat.”

 

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COST OF LIVING

‘Huge differences’: How you can save money on Swiss credit cards

Hardly anyone lives without a credit card these days, but have you ever thought of how much this little piece of plastic costs you each year and if you could save? A new Swiss survey provides the answers.

‘Huge differences’: How you can save money on Swiss credit cards

Most people routinely use their cards without giving any thought to fees and charges involved in each purchase.

This all the more relevant when you pay for goods and services abroad because your bank charges a fee for every transaction made outside of Switzerland  — typically, between 1 and 5 percent, depending on the terms of your contract.

However, a new study by an independent online comparison service Moneyland shows that “there are huge differences in costs and benefits” among various cards.

This finding is based on comparison of 168 Swiss credit and prepaid cards, taking into account “all relevant fees for the first two years of use, as well as Swiss franc to euro exchange rates” in 2022.

The study concluded that “many consumers could save hundreds of francs per year by changing their payment cards”, according to Moneyland CEO Benjamin Manz.

For instance, occasional users could save 560 francs and frequent users could see savings of more than 830 francs in the first two years if they were to switch to cheapest cards, Manz said.

Which card you ultimately choose depends on several factors. For instance:

The cheapest credit cards for travellers

If you frequently travel to foreign countries and spend 5,000 euros (equivalent of about 5,000 francs and 5,200 USD) outside of Switzerland every year, or withdraw 1,000 euros per year at foreign ATMs, your best bet is the Silver Multi-Currency Credit Card from Swissquote. It costs 292.05 francs over the first two years of use.

Next are the Gold Multi-Currency Credit Card from Swissquote (392.05 francs); the Coop Supercard Visa or Mastercard (458.95 francs), the Jumbo and Manor Mastercard credit cards from Viseca (463.55 francs), and the new UBS key4 Mastercard Standard (485.15 francs).

READ MORE: How to save on groceries in Switzerland

If you are an occasional user, meaning you spend 200 francs in Switzerland per month and 1,000 euros per year outside of Switzerland, you will get most bang out of the Poinz Swiss Loyalty Card and Swisscard Cashback credit cards.

The study found that over a two-year use, these cards give you more money than they cost you.

How can this be?

As Moneyland explains it, “the cost of using the Poinz card is -25.10 francs, and that of using the Cashback card is -12.30 francs. Both of these are American Express credit cards issued by Swisscard. The reason why the costs are negative is that the cash back rewards you get are higher than the total costs”.

Next the Coop Supercard (Visa or Mastercard), with total costs of 42.85 francs; and the Jumbo and Manor Mastercard store credit cards issued by Viseca, with total costs of 43.60 francs.

“All of the cheapest credit cards for occasional users are free credit cards in the sense that they do not have annual card fees”.

READ MORE: Six no-gimmick websites that help you save money in Switzerland

What about frequent users?

Moneyland defines ‘frequent’ consumers as those who spend 1,000 francs per month in Switzerland, and 5,000 euros per year in foreign countries. It also considers cash advances — five 200-franc withdrawals in Switzerland and five 200-euro withdrawals from foreign ATMs.

This particular group of people would benefit most from the American Express cards from Poinz Swiss Loyalty with total costs of 289.80 francs, and the Swisscard Cashback cards with total costs of 319.80 francs over the first two years.

Next are the Silver Multi-Currency Credit Card from Swissquote (362.05 francs) and the Coop Supercard Visa or Mastercard (454.75 francs).  

Prepaid cards

These are the cards with a credit limit based on the account holder’s deposit.

If you an “average” user, defined as someone who spends 500 francs per month of purchases from Swiss merchants, 2,250 euros per year of purchases from foreign merchants, and makes three cash withdrawals in Switzerland and eight reloads of your prepaid card balance per year, the cheapest card is the Neon Free Mastercard —which comes with the Neon Free bank account.

It costs 26.60 francs over the first two years.

Migros vs Coop: Which Swiss supermarket has the best bonus point system?

Other cheap cards are the Neon Green Mastercard (136.60 francs), the UBS key4 Mastercard Prepaid (216.40 francs), the Postfinance Mastercard Value (241.80 francs), and the Cornèrcard Energy (282.65 francs).

Using cards from digital banks like Neon “is particularly advantageous for travelling”, the study found.

“The reason is that many of these cards have much lower foreign transaction fees and better exchange rates than credit cards and debit cards from conventional Swiss card issuers and banks”, Manz said.

However, prepaid cards are not as widely accepted as credit cards, especially for hotel bookings and car rentals. “For that reason, taking at least one affordable credit card with you when you travel, in addition to cheap cards from neobanks or other debit cards, is a good idea,” Manz pointed out.

Another tip for travellers using Swiss cards abroad: “Always choose the local currency for card payments, and never Swiss francs…this lets you avoid high currency conversion fees”.

What else should you know about Swiss credit cards?

Another consumer comparison site, Comparis.ch, has also rated commonly used credit cards using its own criteria. You can see the results here.

READ MORE: Seven products that are becoming more expensive in Switzerland

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