EEA and Swiss Model


As part of its work scrutinising the Brexit negotiations and the UK's relationship with the EU once we have left, the Committee for Exiting the EU looked at the EU's relationship with Switzerland. In the session I concentrated on how the movement of people works for the Swiss.

Stephen Kinnock: Good morning, gentlemen. I wanted to ask a little more about the system that has been put in place in Switzerland around hiring and recruiting for jobs. My understanding is that, if there is an area of the country that has higher than average unemployment, jobs can only be advertised for local workers in that area. There is a period of time under which that has to be in place. Can you clarify what that period of time is? I have also read that it is regions and sectors. Are there particular sectors that apply? Can you set out in a bit more detail how that system works.

Professor Schwok: Nowadays, in Switzerland, the average unemployment rate is 3%. Until 2020, if there is an unemployment rate of 8% in one branch, the mechanism that I explained of earlier advertisement will be put in place. After 2020, if the unemployment rate is 5%, this mechanism will apply. This mechanism, again, is window dressing; it is just informing the unemployed about the job five days in advance. After five days, the whole of Europe will be informed about the job.

The employer will automatically get some files that are similar to the announcements from local residents, Swiss or non-Swiss. The employer will still be able to hire a person from outside Switzerland in the EU if he wants to do that. It is not a genuine preference for nationals or residents. Sorry to repeat myself, but it is just window dressing to give the impression that they are doing something. The employer is just made aware that he should maybe look at the files of the people in the local area.

Stephen Kinnock: When you say it is window dressing, do you think that is the general view of the Swiss people?

Professor Schwok: It is not the official view of the Parliament. It is not the official view of the main parties that voted for this. I am an independent scholar. I am not part of the Swiss People’s Party, but I have to admit that this legislation does not apply what the Swiss people wanted to put in the constitution, article 121a.

Stephen Kinnock: I know that this is a different type of speculation but let us say that we made that our policy. If we wanted to maximise access to the single market and this was one way in which we could argue that we had greater control over the movement of labour, given the experience in Switzerland, you do not think that it would fly in the UK, in terms of public consent?

Professor Schwok: In my view, it does not solve the issue that Swiss people wanted to put in the constitution, which was national preference and quotas. This does not solve the issue. It is good. I am also an employer. I hire people in my institution. It is good that, as an employer, I am aware of people living in my area, I get their profiles and I do not have to look for someone far away if I can get the profiles beforehand, but it is no more than that. In terms of public relations, you can say, yes, the Swiss are doing something against free movement of people, but it is just PR, to be honest. It is not a real quota; it is not a national preference.
Personally, I am against quotas and national preference, but I have to admit that it is not the quota or national preference that the Swiss people wanted when saying yes to this popular initiative in a referendum in 2014.  

Stephen Kinnock: You have said that you do not think the other EFTA countries would want the United Kingdom to join EFTA or to join the EFTA pillar of the European Economic Area. If you look, for example, at the interview that the Prime Minister of Norway gave in Davos recently, which was broadcast on BBC News, she said it is absolutely clear that it is in Norway’s best interests for the UK to have the softest possible Brexit. General consensus is that the EEA would be the softest possible Brexit. What is your evidence to suggest that the EFTA countries would not want the UK in EFTA or in the EEA pillar of EFTA? Do you have any concrete evidence for that?

Professor Schwok: It would be an elephant in the shop of the EFTA pillar.

Stephen Kinnock: Why do you think the Norwegian Prime Minister said that it is in Norway’s national interest for there to be the softest possible Brexit? 

Professor Schwok: Because Norwegians, Icelanders and especially Liechtensteiners found tricks to negotiate quietly with the EU on the free movement of people. Having the UK in the group, you cannot find tricks and negotiate. For instance, Liechtenstein got exceptions on free movement of people and nobody is aware of it. It does not apply free movement of people, for obvious reasons, but nobody is aware. Nobody cares. It can do it discreetly. If you are in the middle of the shop, you cannot negotiate discretely on fisheries or all types of matters.

Another point is the EFTA pillar is a supranational pillar. You have to understand how it works. If there is new EU legislation relevant to EEA, they have to opt in all together. If one of them wants to opt out, they all have to opt out. Let us say the UK is a member of the EEA EFTA pillar and there is new legislation on fisheries. The UK does not want it for whatever reason, but the Norwegians want to opt in. They cannot opt in. They cannot adapt to the new legislation, because it is a general supranational pillar. They have to opt out, although they want to opt in. You will be slaves or hostages of the Norwegian or Icelandic people. You want to opt in; they do not want to, so you have to opt out, and you will suffer retaliation, so-called rebalancing measures, from the EU. It is a supranational pillar, and I am not sure that you want to be in a supranational pillar.

Stephen Kinnock: You could argue that, when the European Union introduced qualified majority voting, that was, by definition, a massive step in a supranational direction, so you are part of that in the EU as well. On free movement of people, articles 112 and 113 of the EEA agreement are the legal basis in the EEA agreement for both pulling the emergency brake on free movement of labour and introducing the quota-based system that is the case in Liechtenstein. The legal precedent has been set using articles 112 and 113.

Do you not think that, as the EEA agreement has existed since 1993 and is well established and understood, that any country that is subject to the EEA agreement would have the legal right to invoke articles 112 and 113? Whether you are Norway, whether you are the United Kingdom, whether you are Liechtenstein, the law is there in the treaty and the precedent has been set.

Professor Schwok: You have a legal right to invoke it, but if you do it you will suffer so-called rebalancing measures from the EU, which is what I call here retaliation. It is a risk, because there are rebalancing measures and you can suffer from this. You will suffer more if you are a victim of retaliation due to the position of Iceland or Norway. You see my point. Therefore, I am not sure it is what you usually look for.