Strong franc lures EU workers to Switzerland

[ZURICH] The strong Swiss franc is a beacon for foreign workers aiming to cash in on the currency's purchasing power just as Switzerland aims to limit immigration from the European Union, a government panel reported on Tuesday.

The State Secretariat for Economics (SECO) noted a rise in the number of workers commuting into Switzerland's border regions from neighbouring countries. Foreign commuters make up more than a quarter of the workforce in the Italian-speaking southern canton of Tessin, and nearly a fifth in border cities Basel and Geneva, it found. "With the Swiss franc's appreciation against the euro, the incentive for people in neighbouring countries to get jobs in Switzerland has risen," SECO said in its annual report on labour movement trends. "Despite the overall satisfactory development on labour markets, it cannot be excluded that competition for local residents from foreign workers has increased in some regions and labour market segments." Switzerland's central bank scrapped its cap on franc strength against the euro in January, sending the safe-haven currency soaring against the single currency.

SECO noted a jump in the number of people moving to Switzerland from euro zone economies hit hardest by the bloc's long-running crisis, although overall immigration from the European Union and EFTA countries fell.

The net inflow from Portugal, Italy and Spain jumped to 22,300 last year from 13,500 when the crisis erupted in 2008, and from the 10 eastern European EU members to 10,500 from 4,600, the figures showed.

The net inflow of people from EU countries plus EFTA nations Iceland, Liechtenstein and Norway fell by a quarter in 2014 to 50,600. That was slightly below the average over six years but still accounted for most of Switzerland's net immigration of 73,000 people last year.

SECO gave no reason for the drop, but noted fewer people have been coming to Switzerland from Germany.

More than 60 per cent of residence permits for people from the EU and EFTA countries went to those coming to work.

Switzerland's economy has performed relatively well and its labour market has been stable although the franc's surge is expected to hit economic growth and jobs.

Nearly 2 million foreigners lived in Switzerland at the end of last year, 24.3 percent of the population and up from below 15 percent 30 years ago.

The Swiss government in February proposed a draft law to limit immigration from the EU after last year's successful referendum launched by the right-wing Swiss People's Party to impose strict quotas.

The referendum won narrow approval despite opposition from the government, banks, drugmakers and other industries that rely heavily on skilled workers from the EU.

Switzerland is not in the EU but has accepted its principles of free movement of labour as part of seven treaties governing bilateral economic ties.

REUTERS