What the Swiss vote might herald for the EU
"A storm, an earthquake, a day of mourning!" The media comments both from Switzerland and abroad after the Swiss voted by a majority of 50.3% to reduce European immigration and reintroduce quotas on 9 February were all doom and gloom. Most of the pundits and editorialists focused on the impact the decision will have on the Swiss economy and, more generally, relations between Switzerland, the EU and the rest of the world. Few noticed that the Swiss vote may also reflect a malaise that, sadly, extends well beyond Switzerland.
While it is difficult to quantify at this stage how the vote will affect the Swiss economy, it seems rather obvious that the effect won’t be positive. Several high-ranking EU politicians, chief among them German Chancellor Angela Merkel, have expressed their discontent. The EU has signaled that Switzerland unilaterally revoking or at least redrafting one of several bilateral agreements could in fact jeopardize all of the others. As a first measure, the EU has halted negotiations on the electricity market, which, according to the Swiss energy minister, were “95% completed.”
Along with additional retaliatory EU actions, the uncertainty that Swiss businesses confront could also have a major negative economic impact. Knowing that it will take up to three years to implement the decision means that Swiss companies will be unsure about their planning and hiring policies during this time.
Why the Swiss voted as they did has been intensively analyzed in the past week. Opinions range from xenophobia to “many Swiss are angered by roads and highway congestion, overcrowded trains and real estate prices and rents going through the roof.” However, I think such explanations are simplistic.
A deeper reason for the decision can be found in German and French (and likely other European) media: “Had a similar vote been conducted in our country, the outcome would have been the same as in Switzerland.” Far from distinguishing themselves, the Swiss were just illustrating a malaise that many other Europeans, who cannot express it through direct democracy, also feel.
This malaise is best summarized in a model developed a couple of years ago by Princeton Professor Dani Rodrik and called the globalization trilemma. This trilemma states that you cannot have globalization, nation states and democracy all at the same time. One of them has to give. In the case of Europe, you can replace the term “globalization” by the EU.
Almost five years into the euro crisis the EU ideal has been seriously dented in the mind of many Europeans. They see it more as something alien that they, or their national politicians, no longer control. The narrative many European politicians adopt when talking to their constituents further reinforces this perceived EU democratic deficit. At the risk of oversimplifying, it can be summarized as: “whenever something good happens, I (your national politician) am responsible for it; whenever something bad happens, it’s Brussels.” Unfortunately, many bad things have happened lately in Europe.
Between 22 and 25 May, the people of all member countries of the EU will elect a new European parliament. According to the polls, “traditional” parties from the right and left may suffer severe losses, with anti-European parties from the extreme left and the extreme right gaining traction almost everywhere. They could win up to one-quarter of the seats in the parliament. Ignoring this, ridiculing the parties as “populist” and failing to address the fears many Europeans have that they no longer control their own destiny, will only reinforce the protest vote. In this respect the Swiss didn’t just erect barricades against Europe. They also fired a warning shot at European politicians, who would be well advised to ensure true democratic backing for their European construction.