The unravelling of the core?

The latest report (here) from Switzerland is claiming that the Swiss are considering imposition of limits on the admission of the migrants from the EU15 + Malta & Cyprus. First, background, then conclusion:

Per EUObserver report, "under bilateral accords signed with the EU, the Swiss government is entitled to limit the number of workers entering the country" from the original EU15 states, plus Cyprus and Malta, whenever Swiss unemployment rises above a certain threshold.The threshold is not an absolute level of unemployment, but a rate of increase in jobless of more than 10% in a year "compared to the average rate in the previous three years". The latest data shows that Swiss unemployment reached a new three-year high of 3.5% in April - a 35.5% increase y-o-y. EU27 is now forecast to reach 9.7% unemployment in 2009 and 10.9% in 2010.

Currently there are no restrictions on the number of EU15+2 workers that can take jobs in Switzerland. "If the clause is activated", says EUObserver, "immigration from the EU15, plus Cyprus and Malta, will be limited to the average migration rate of the previous year plus five per cent for a maximum of two years.

So what is my analysis of this development? Access to the Swiss market - within a broader EEA community - is a legitimising point for EU in so far as it shows that European Union has attraction as a trading, capital and migration partner for countries which, unlike Eastern Europe, cannot be either bought or bullied into submission. Norway, Iceland, Lichtenstein (EEA members) and Switzerland are, at this point in time, the only countries that can claim such a status, although in the past the EU tried to 'compel' all of these states in relation to various aspects of their internal regulations.

Should Switzerland put in place even symbolic restrictions on the EU citizens' ability to gain work there, one of the three legs of this pillar will be gone. The questions to be asked in this context are:

1. Should Swiss authorities limit inward migration from the EU15+2, will this trigger a push within the EU15 to further restrict access to their own labour markets for the EU12 Accession states?
2. Should the Swiss elect to enact the restrictions clause, what signal on the integrity of EEA+ does this send out in the context of the future EU enlargement? Are we risking losing Switzerland as an investment and jobs market partner in order to gain Turkey? Albania? and so on?
3. Will Swiss-imposed restrictions signal an alternative 'Third' way for countries currently finding themselves in a difficulty within the harmonized EU monetary and FX policies - e.g. Austria - for distancing themselves from the full EU membership into an Association-style treaty Swiss-style?

In an opposite, but widely anticipated move, Iceland is now swinging in favour of full EU membership - a dubious win for Brussels, considering the state of general economic collapse in that country.

A disclaimer: applicable to anything I write on the EU - I do not advocate any of the above measures. This post is simply about presenting an argument as to what might be possible.