Swiss clash with EU foreshadows tensions if UK votes to leave

The Swiss face a confrontation with Brussels after voting for quotas on immigrants from the EU, - in a foretaste of tensions that could be unleashed if Britain votes to leave the union.

Viviane Reding, European Commission vice-president, suggested that Swiss companies could face limits on their access to the European single market if the country pressed ahead with the new quotas.

"The single market is not a Swiss cheese," she told the Financial Times. "You cannot have a single market with holes in it. Business people will make their cost-benefit analysis and decide where to establish their companies."

Switzerland is not a member of the EU but has signed agreements to gain access to the 500m consumers in the world's richest single market, including a 1999 deal allowing Swiss and EU nationals to move freely between the two territories.

However, after 50.3 per cent of voters backed an initiative put forward by the ultraconservative Swiss People's party (SVP), the government will now have to extend a quota system in place for non-EU nationals to cover arrivals from the bloc.

Bern, which had opposed the initiative, acknowledged that the vote would lead to a "systemic change" in the country's relationship with the EU, and warned that it would also usher in a period of uncertainty. "We can't be sure how these negotiations will play out," said Simonetta Sommaruga, the country's justice minister.

David Cameron, the UK prime minister, has promised a referendum on Britain's EU membership in 2017; if the country voted for an exit it could find itself in a similar position to Switzerland in trying to exercise national sovereignty while simultaneously trying to retain access to the European market.

Ms Reding said the Swiss could not expect to restrict the free movement of people while continuing to enjoy free movement of goods, capital and services.

"I doubt that member states will be ready to accept renegotiating the free movement of persons agreement alone - and not touch the other bilateral agreements the EU has with Switzerland," she said.

The result of the Swiss vote is likely to reverberate across Europe, where hostility to immigrants is growing.

The debate has been particularly prominent in Switzerland, where net immigration has been running at between 60,000 and 80,000, or about 1 per cent of the country's population, annually for the past seven years.

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The prospect of the EU cancelling the market access accord signed at the same time as the 1999 agreement has alarmed Swiss business.

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