Norwegian Immigration and Europe’s Swiss Dilemma

Europe's immigration<p>Europe's immigration</p>

*This article was originally published on Fair Observer.

Norway and Switzerland consistently rank at the top of every major index that measures quality-of-life, happiness, human development and level of democracy (first and fourth).  They also enviably boast some of the highest living standards in the world, making them popular choices for immigrants seeking to start a new life. Both are also fiercely independent and opted to retain their sovereignty by declining to join the European Union (EU) when given the opportunity.

In 1972, and again in 1994, Norwegians went to the polls to decide whether they should join the EU. In both cases, the referendum fell flat by slight majorities. Nevertheless, Norway, along with Lichtenstein and Iceland, became a member of the European Economic Area (EEA) — the extension of the European internal market to members of the European Free Trade Association (EFTA) — in 1992.

The Swiss, also a member of the EFTA, when given the choice, rejected membership in the EEA in 1992. Instead, a series of bilateral laws were enacted, giving Switzerland access to the European single market. In effect, both Norway and Switzerland became ostensible members of the EU, without ever actually becoming members.

Following the Swiss Lead?

That is until Swiss citizens went to the polls on February 9, 2014, and approved the reintroduction of immigration quotas by the slimmest of margins (50.3% supported the measure), effectively repudiating their previous positions on free movement and freedom of labor within the European single market.

Following the Swiss vote, a refrain from right-wing populists called for similar referendums to take place across Europe. Geert Wilders, the head of the Dutch Freedom Party, tweeted:“What the Swiss can do, we can do too: cut immigration and leave the EU.” The English leader of the UK Independence Party (UKIP), Nigel Farage, echoed Wilders’ sentiments by stating that voters in Britain would follow suit if given the opportunity, while the French National Front leader, Marine le Pen, went so far as to launch an online petition calling for a Swiss-style referendum to be held in France.

In Norway, the anti-immigration, far-right Progress Party (FrP), unlike most right-wing populist parties, actually has a seat in the government as part of the ruling coalition with their counterparts in the Conservative Party. After all their rhetorical rumblings about immigration, will the FrP set out to exploit the Swiss vote by attempting to push for a similar vote in Norway? More importantly, what does the Swiss vote portend for the future of immigration in Europe?

Europe’s Swiss Dilemma

One of the quirks of Switzerland’s political system is the use of direct democracy alongside traditional representative democracy to make political decisions. Thus, important proposals in Switzerland, more often than not, come down to plebiscites, as occurred in February, to decide the future of their country. For example, 11 referendums were held in 2013, ranging from increasing the hours a petrol station may remain open to abolishing military conscription. Any Swiss citizen or group can propose the introduction or amendment of legislation through a “people’s initiative,” which requires 100,000 signatures in order to call a national vote.

Consequently, exercising their democratic right, the nationalist People’s Party (SVP), led and largely financed by billionaire entrepreneur Christoph Blocher, introduced and spearheaded the campaign to reestablish immigration quotas, taking both Brussels and Bern by surprise when the measure passed. Now the National Council in Bern has three years to enact the necessary restrictions democratically demanded by the “majority” of their countrymen.

Switzerland’s decision is emblematic of wider anti-immigration sentiments spreading across the continent as persistent unemployment and economic stagnation breeds discontent among European citizens. Right-wing populists have capitalized on this antipathy by shifting the blame onto their two favorite targets: the EU and immigration. To many Europeans, the EU is the cause of much of Europe’s ongoing misery: the result of the euro crisis and subsequent austerity measures. Anti-establishment parties want to curb or even eliminate the “mission creep” of the EU and return governing power to the nation state.

The other popular scapegoat of the far-right is immigration. Right-wing politicians claim that foreign workers drive wages down and place additional stresses on already-taxed social systems. The influx of migrants into major urban centers can lead to overcrowding and rising rents. There are also fears of the rise in abuse of welfare systems or what is sometimes referred to as “benefits tourism.” These factors are on top of what populist politicians perceive as an assault on traditional values — be they Italian, Danish or Austrian — by immigration.

Immigration, an issue that has long been a rhetorical tool employed by Eurosceptics, has become an increasingly prominent issue in Europe now that the Swiss have actually acted to curb it. This comes ahead of European parliamentary elections on May 22-25, where right-wing populists look set for their best result yet. To them, the Swiss vote justifies their position on immigration as one held by a majority in a European state. It provides a model for future self-determinative votes on immigration and also places immense pressure on ruling governments to at least look like they are taking action in order to preserve their place in government and appease voters.

The major paradox of immigration within Europe is that with the introduction of low-income countries to the EU, pressure shifted from the free-flow of movement between countries of comparable economic standing to a flood of people traveling from east to west, or south to north, in search of better opportunities.

Even more disheartening is the path of many educated professionals from their home states, taking their skills and knowledge away from where they are needed the most. A professional sector that is depleted significantly diminishes the chances of poorer countries from developing the way they would, if they had retained their top talent. Some recompenses exist in the form of remittances, but it is not the same as building up comparable institutions and services to the West. Therein lies the real dilemma of free-movement within Europe that the Swiss sought to curb and some Norwegians now wish to emulate.

The Norwegian Balancing Act

Norway’s foreign-born population comprises 12% of the country, almost half of Switzerland’s, where almost a quarter (23%) of the nation’s population is foreign-born. Immigration reached 78,600 in 2012, with most immigrants coming from eastern Europe. However, Norway’s GDP per-capita (PPP), third in the world at $65,640, is $12,359 higher than Switzerland’s ($53,281), which is the fifth highest in the world.

It almost seems confusing why a country doing so well would talk about turning its back on immigration. However, if any Western country were to follow Switzerland’s footsteps, Norway would be a likely contender. It has the wealth to insulate itself from migration and, more importantly, unlike elsewhere in Europe, staunch anti-immigration elements are part of the ruling regime.

When asked by a local newspaper, the Progress Party’s immigration policy spokesperson, Mazyar Keshvari, himself, the child of asylum seekers from Iran, said: “The idea of a referendum is interesting, and Norway also should have a referendum on immigration. I am quite sure that there is majority support for tightening across the majority of Norwegian parties.”Siv Jensen, the leader of the far-right Progress Party, coyly suggested the issue was not about immigration but increased democratic participation, implying the potential for a future referendum without making any clear statement on the matter.

Much of the problem in Norway comes down to two things: the myth of being forced to share the spoils with those who haven’t earned them, and the changing cultural landscape. The fact is, migrants who live and work in Norway almost always pay more in taxes than they could ever receive in benefits. Norway has some of the highest marginal income tax rates on the planet. This is in addition to value added taxes (VAT) on goods and services that stand at a whopping 25%.

Economists are usually the first to point out that countries tend to benefit from immigration. The actual problem in Norway is the abuse of its overly generous social welfare system, rather than immigration. In fact, “naving,” named after the Norwegian social welfare bureau NAV, has become a derogatory verb used to describe those who willingly exploit the system. The phrase has become so frequently used that it was named the word of the year in 2012. To limit abuses of the system, the new government has now made it a priority to make access to social benefits contingent on a number of factors.

The other fear of immigration is the so-called threat to national values. It is easy for Norwegians to feel apprehensive as hijabs appear more frequently, while parts of the capital begin to resemble Bucharest rather than Oslo. Populists see this as a threat to ethnic homogeneity in a country famed for its blonde-haired, blue-eyed citizens.

However, it has been well-documented that the majority of migrants to Norway are from EU countries and have come for labor purposes. It is important for governments to remember that immigration does not necessarily foreshadow an assault on values or ethnicity, but rather the increased cohabitation of the world’s people in a fluid, globalizing world — something Norway knowingly signed up for when it joined the Schengen Area in 2001.

Norwegians need only look at other nations where diversity is prized, like Brazil, the United States or Australia, to see how a multicultural model can thrive. Norway is also the country where the second-largest immigrant community, after Poles, is Swedish. When Swedes are the ones doing your service industry jobs, it is a signal you are doing well. Ironically, the second-richest country in the world, Luxembourg, has the highest percentage of foreign-born population in Europe. At least for Luxembourg, immigration has not caused the sort of problems the Swiss seem to fear.

The real question to be asked is how would Norwegian lives improve if immigration was curbed? Simply put, they wouldn’t. It would come at a hefty economic cost. Norway would lose a ready source of employment necessary for a resource-rich country of 5 million. Those immigrants pay taxes on income, use services and participate in a robust labor market.

The cultural diversity immigration brings should be embraced with the knowledge that immigrants come to new lands for opportunity, not to replace local cultures. While immigration needs to be kept at a reasonable level for a small country, it is a good thing, and what Norwegian politicians should be focused on is curbing abuses of the generous Norwegian welfare system, not contemplating keeping immigrants out.

Norway is doing better than ever, and immigrants are a large part of that success with many foreign engineers and industrial workers helping to tap the country’s lucrative oil wealth. If Norway wishes to continue its prosperous path, talent and labor drawn from outside a small nation is a necessity for its future success in a globalized age. With the lowest unemployment rate in Europe, a surplus of vacancies that cannot be filled solely by the national education system alone, and a demand for over 10,000 qualified personnel over the next five years just to fill positions in the oil industry, immigration will be a key to Norway’s continued success.

A Swiss Virus?

In a recent article, the German weekly news magazine Der Spiegel referred to the referendum as the Swiss Virus, implying the potential spread of anti-immigration action across Europe. Indeed, the growing popularity of populist right-wing parties in Europe signals a worrying trend of increased isolation and the obstruction of the European project. Not long after the Swiss vote, Iceland pulled out of EU accession talks, citing the lack of support for EU membership.

What waits to be seen is how the EU responds to the Swiss vote. After the result was reported, Brussels responded with a diplomatically phrased signal of disappointment. But as behind the scenes wrangling over specifics of the new law take place, politicians across Europe await the outcome. Much hinges on both, how Brussels reacts and how Switzerland fares. The Swiss may have set a precedent for de-integration, though they were never “fully” integrated, but the result of their actions remain to be seen.

Brussels’ countermove needs to be harsh enough to send a strong message to the Swiss, while effectively showing other skeptical European nations that the tangible benefits of membership in the European community far outweigh the costs, real or perceived, of immigration. Freedom of movement is a fundamental right of EU citizenship. If member states want to keep the benefits that come with belonging to the largest free-market trading bloc in the world, they need to be convinced that it is all or nothing.

Germany’s foreign minister, Frank-Walter Steinmeier, expressed his dismay by saying: “Cherry-picking with the EU is not a sustainable strategy. The Swiss have damaged themselves with this result. The fair co-operation we have had in the past with Switzerland also includes observing the central fundamental decisions taken by the EU.”

The Swiss vote is a dark turn in a trying 21st century for the European bloc. It remains to be seen how other nations act in regards to immigration once European parliamentary elections are held, but Brussels can rest assure that the Norwegian position should not change.


*This article was originally published on Fair Observer.


About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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