* Free movement of people accord in force since 2002
* Swiss right-wing want to re-impose quotas for EU citizens
* Unease about rising rents, cultural alienation
* Business groups warn its would lead to skills shortages
By Caroline Copley
WINTERTHUR, Switzerland, Feb 4 Low taxes and
good infrastructure aside, what entrepreneur Thorsten Schwenke
really needs to grow his small Swiss-based business is the right
people, regardless of their nationality.
That's why he is so bewildered by a vote in Switzerland on
Feb. 9 on whether to impose restrictions on immigrants from the
European Union, and by the proposal's increasing popularity in a
country where foreign labour helped forge a powerful economy.
"If I was forced to only consider hiring Swiss people, I
would just move," said 41-year-old Schwenke, who founded
Thelkin, a maker of mechanical testing equipment for orthopaedic
implants in the northeastern town of Winterthur in 2010.
"For a company my size, the right people are more important
than the tax benefits."
A vote in favour of the motion, 12 years after a free
movement of people agreement with the European Union came into
force, could hurt an economy reliant on foreign professionals by
increasing red tape and calling into question its bilateral
accords with the bloc.
Hailing from Berlin, Schwenke is one in a long line of
foreign entrepreneurs who have helped power Switzerland's
economic success story over the past 150 years, including
German-born Henri Nestle who gave his name to the
company that is now the world's largest food group.
But with net immigration running at around 70,000 people per
year on average - equivalent to the size of St. Gallen, a
university town in eastern Switzerland - many Swiss blame
newcomers for rising rents, crowded transport and more crime.
The right-wing Swiss People's Party (SVP), which wants
Switzerland to seize back control by reintroducing immigration
quotas, is tapping into concerns immigrants are eroding the
country's Alpine culture and bolstering the 'yes' vote.
"Many people feel this is challenging their identity, even
if there isn't any concrete economic impact on a personal
level," said Georg Lutz, a professor of political science at the
University of Lausanne.
Foreigners now make up 23 percent of the country's
population of 8 million according to official data, the second
highest proportion in Europe after Luxembourg.
It's not just the Swiss who are having second thoughts about
free movement. With the economy in Europe in the doldrums and
austerity policies biting, mainstream politicians across the
region fear the right and far-right will gain ground as
increasing numbers fret immigrants will take their jobs.
In Switzerland, the proposed curbs take aim at
highly-skilled workers from the European Union, who opponents
argue are needed to fill jobs at multinationals and hospitals.
Italians are the largest group, followed by Germans, who
typically work in IT, financial services and healthcare. Around
half of the people employed in R&D at drugmaker Roche
in Basel are foreign, its Austrian CEO Severin Schwan has said.
"Innovation is the driver of the Swiss economy. That's why
we need highly qualified workers inside Switzerland and from
abroad," said Hans Hess, head of Swissmem, which represents the
electrical and mechanical engineering industries.
Four in every 10 new companies in Switzerland are founded by
foreigners, according to business information provider Orell
Fuessli Wirtschaftsinformation. In 2013, they created around
30,000 new jobs.
Foreigners are also bigger shoppers. Around one quarter of
the growth in private consumption since 2008 can be attributed
to immigration, according to Credit Suisse.
A survey by Gfs Bern published last week found support for
the proposal had risen to 43 percent from 37 percent in an
earlier poll. Opposition eased to 50 percent and 7 percent were
The shift has set off alarm bells among opponents, who fear
the SVP - the country's largest party - will manage to mobilise
more of its grassroot supporters in the final few days.
A 'yes' vote could hurt relations with the EU, which has
warned it will not allow new negotiations on free circulation, a
Pollsters say voters without political affiliation may use
the vote to vent their frustration against a perceived lack of
action by the government over their concerns about immigration.
"I don't want to live like a sardine in a tin can,"
independent politician Thomas Minder, who supports the
initiative, told tabloid newspaper Blick.
In the town of Zug, 20 km south of Zurich, rock-bottom
corporate tax rates have attracted some 30,000 companies to the
once poor farming region, including commodities trader Glencore
Xstrata. But a flood of rich immigrants has pushed up
the cost of living and driven many locals out.
Despite their shared language, the relationship between the
Swiss and the Germans is at times testy.
"Germans get the highly-paid jobs and go and buy the big
houses," said Thelkin's Schwenke.
"There's a certain amount of jealousy and I can totally see
that. If all of a sudden 30 percent of Berlin were made up of
Swiss people, that would be controversial."