Swiss Brexit in referendum

The Swiss will go to the polls on June 14 to decide in a referendum whether to cap the population at 10 million, in a vote that some have likened to a "Swiss Brexit" and has alarmed many companies who fear an economic hit if the proposal is passed.

Supporters of the restrictions, led by the right-wing Swiss People's Party (SVP), argue that population growth is straining local infrastructure, roads and public transport to the limit, as well as fueling rising rents and crime.

Companies and employers, however, fear that a "yes" vote would limit Switzerland's access to skilled labor and damage relations with the European Union, its largest export market.

"As a Swiss citizen, this worries me greatly for the future of our country and its prosperity," Martin von Moss, chief executive of the luxury hotels Belvoir in Rischlikon and Sedartis in Thalwil, near Zurich, told Reuters.

"If we lost all the foreign workers, the hotel simply wouldn't be able to function," he said, noting that almost half of his 115 employees come from outside Switzerland.

This topic, according to recent research, has divided voters, with the latest poll showing that 47 percent support the proposal, while 52 percent oppose it.

Switzerland's population grew to 9,1 million by the end of 2025, from 7,3 million when the free movement of people between Switzerland and the European Union was introduced in 2002.

Foreigners now make up almost 28 percent of the population.

"Switzerland is a small country with a limited territory, and in recent years it has seen the highest population growth," SVP MP Ivan Pahud told Reuters.

The vote is the latest example of how right-wing parties are exploiting concerns over immigration, housing and public services, as seen in Britain's 2016 referendum on leaving the EU, as well as in the rise in popularity of parties like France's National Rally and Germany's AfD.

Limitation as an insurmountable obstacle

Critics from the business community point to the damage that, they argue, population restrictions could cause to one of Europe's most resilient economies.

Zurich-based biotechnology company Molecular Partners, where more than half of its approximately 120 employees are not Swiss, said it is already finding it difficult to find the people it needs.

"I think if we said we could only hire from the Swiss talent pool, or that we could only work with Swiss companies, that would essentially be a roadblock," said Daniel Steiner, the company's senior vice president of targeted radiotherapy.

"We might be forced to move some of our operations out of Switzerland."

Rudolf Minsch, chief economist at business association Economiesuisse, said the restriction was a "populist attempt" to solve complex problems with a simplified, artificial border.

"It sells the illusion of a free lunch and won't solve our housing or transportation problems," Minsch said.

Like many European countries, Switzerland is facing an aging population.

According to the Swiss National Bureau of Statistics, by 2055 the proportion of the population aged between 20 and 64 will fall from 60 to 56 percent. At the same time, the proportion of people over 65 will increase from the current 21 to 27 percent, the British agency points out.

Opponents of the restrictions argue that many immigrants were entrepreneurs who developed the Swiss economy, citing well-known companies such as Nestle, Swatch and ABB, which were founded in whole or in part by foreigners.

According to a 2023 Avenir Suisse study, 39 percent of all company founders in Switzerland were foreigners.

Impact on growth

Referendums are a cornerstone of Swiss politics, with voters going to the polls four times a year to decide on various national and regional issues.

According to the latest proposal, if Switzerland's population exceeds 9,5 million, a threshold projected to be reached in 2031, the government would have to take measures to prevent it from reaching 10 million, which is expected in 2042.

If the population reached 10 million, Bern would have to terminate international agreements that encourage population growth.

This includes an agreement with the EU that allows for the free movement of people, a condition of the complex web of Swiss agreements with Brussels that give the country access to the European single market.

Claude Maurer, chief economist at the BAK Economics research institute, said that if Bern were to abandon the bilateral agreements, Swiss economic growth between 2028 and 2045 would be 7,1 percent lower, corresponding to a loss of 685 billion Swiss francs, or $867 billion.

Growth would slow, while inflation, fueled by rising wages, could trigger higher interest rates, Maurer said.

Thomas Mather, another SVP MP and banker, dismissed those fears as intimidation in a statement to Reuters.

Only one in ten immigrants are workers with in-demand skills, and the rate of GDP growth per capita has declined since immigration increased, Mater said.

"We are not against immigration, but it must be moderate and controlled so that we bring in the right people," he said.

"We used to have qualitative immigration, now we have quantitative immigration. Switzerland is still the same size as it was in 1848, and more and more people are living in the same space."

Swiss corporate giants Roche, Nestle, ABB, UBS and Novartis have criticized the proposed restriction.

"We reject this initiative," Roche said in a statement, stressing that a "yes" vote would jeopardise agreements with the EU and further exacerbate the shortage of skilled workers. "Companies depend on access to skilled workers - particularly from the EU."

Hotelier von Moss, who is also president of the Swiss Hoteliers Association, said some hotels could be forced to close, prices would rise and it would be harder for visitors from outside Europe to come to Switzerland.

"We call this initiative a wolf in sheep's clothing. The message is simple, but it hides serious consequences."